97-110
No. 97-110
IN THE SUPREME COURT OF THE STATE OF MONTANA
1997
CHOTEAU LIBRARY BOARD OF
TRUSTEES,
FAIRFIELD LIBRARY BOARD OF
TRUSTEES,
and DUTTON LIBRARY BOARD OF
TRUSTEES,
Petitioners and Appellants,
v.
TETON COUNTY BOARD OF
COMMISSIONERS,
Respondent and Respondent.
APPEAL FROM: District Court of the Ninth Judicial District,
In and for the County of Teton,
The Honorable Marc G. Buyske, Judge presiding.
COUNSEL OF RECORD:
For Appellants:
Kenneth R. Olson, Great Falls, Montana
For Respondent:
Russell R. Andrews, Teton County Attorney, Choteau, Montana
Submitted on Briefs: May 22, 1997
Decided: June 5, 1997
Filed:
__________________________________________
Clerk
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Justice James C. Nelson delivered the Opinion of the Court.
The Choteau, Fairfield and Dutton Library Boards of Trustees (the Boards) have
appealed the Ninth Judicial District Court's December 19, 1996 Order denying their
petition for declaratory relief and mandamus. The Boards raise two issues on appeal:
1. Did the District Court err in denying the Boards' petition for
declaratory
judgment?
2.
Did the District Court err in refusing to issue a writ of mandamus
requiring
the Teton County Board of County Commissioners (the Commissioners) to fund the
libraries in Teton County as required by 7-6-2348, MCA, and Montana Attorney
General Opinions Volume 41, No. 91 (1986) and Volume 44, No. 35 (1992)?
We affirm as to the first issue, and, therefore, do not address the second issue.
BACKGROUND
The Boards filed their petition for declaratory judgment, for writ of
mandamus,
for order to show cause and for preliminary injunction in June 1996, seeking court
intervention to require the Commissioners to maintain funding for the libraries in
the
communities of , Choteau, Fairfield and Dutton (the Communities). This followed the
Commissioners' announcement in the fall of 1995, that county funding for the
libraries
would cease as of the 1996-97 budget year because the Commissioners deemed the
libraries to have no legal existence. Ultimately, this matter was submitted to the
District
Court for decision on the basis of evidence presented at the hearing for preliminary
injunction and on the basis of the affidavits and briefs of the parties. The
District Judge
denied the relief requested by the Boards and this appeal followed. Because we
agreed
to decide this case on an expedited basis, we issued an order affirming the trial
court on
May 22, 1997, indicating that our opinion would follow. The following sets out the
rationale for our decision.
The history of how the libraries came into and maintained their existence
dictates
our decision in this case. Prior to 1968, the Communities each maintained libraries
which had been developed through the efforts of local women's clubs, charitable
organizations, interested citizens and donations. In the summer of 1968, the Great
Falls
Library approached the Commissioners and the Communities with a proposal for
expanding Community library services through the Great Falls Library under the
auspices
of the Pathfinder Library Federation. The Communities and the Commissioners
responded by each separately contracting with the Great Falls Library under
arrangements
whereby the Communities each agreed to provide the buildings and utilities and to
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appoint
library trustees and the Commissioners agreed to levy one mill and pay that money to
the
Great Falls Library. The Commissioners appointed a person to the Pathfinder
Federation
Board of Trustees, and it appears that at least one of the libraries has remained a
member
of that organization.
Importantly, however, a "Teton County Library," as a legal entity, was not
created in 1968, nor did the Commissioners appoint a board of county library
trustees,
although in the previous year, 1967, the Legislature had enacted a statutory scheme
providing for the creation, maintenance and operation of public libraries in
counties and
cities and for the appointment of trustees. See 1967 Mont. Laws 260 (codified
at 44-
218 to -228, RCM (1947); current version at 22-1-301 to -314, MCA). Moreover,
the record reflects that Teton County and the Communities have never entered into
contracts for joint library services as authorized under legislation enacted in
1973. See
1973 Mont. Laws 273 (codified at 44-219.1 and 44-219.2, RCM (1947); current
version at 22-1-316 and 22-1-317, MCA).
In 1979, the County began paying the wages of the individual Community
librarians who had formerly been paid by the Great Falls Library. Nonetheless, in
each
year from 1968 until 1990, the Commissioners approved and signed a contract with the
Great Falls Public Library for library services in the County. The Boards were each
appointed by the respective mayors and city councils of the Communities and the
Boards
hired the librarians; that continues to the present. In 1990, the Commissioners
terminated
the County's contract with the Great Falls Library but continued to levy taxes, and,
from
time to time, contributed revenue sharing funds to support the libraries. The
library
facilities are and have been since the 1970's owned by the respective individual
Communities.
DISCUSSION
The Boards contend that the facts are not in controversy, but, rather, that
the
issues involve questions of law. We agree, and, accordingly, review the legal
conclusions reached by the District Court, de novo, to determine whether the trial
judge's
interpretation of the law is correct. Carbon County v. Union Reserve Coal Co.
(1995),
271 Mont. 459, 469, 898 P.2d 680, 686.
The Boards requested that the District Court declare the existing libraries
to be
legally constituted on either of two grounds: 1) the libraries exist as de facto
public
corporations or 2) the Commissioners should be estopped as a matter of public policy
from challenging the existence of the libraries as county libraries. In support of
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both
approaches, the Boards rely on our decisions in Hammermeister v. Northern Mont. Joint
Refuse Disposal Dist. (1996), 278 Mont. 464, 925 P.2d 859; and Henderson v. School
Dist. No. 44 (1926), 75 Mont. 154, 242 P. 979. We conclude that the Boards' reliance
on these cases is misplaced, however.
In Hammermeister, the boards of county commissioners adopted a resolution of
intention to create a multi-county joint refuse disposal district. The resolution
of intention
described a land area larger than the district which was finally created because one
of the
participant counties ultimately did not pass a resolution to create the district.
While
notice of the original resolution of intention was properly given according to the
governing statutes, no additional notice was given affirmatively apprising affected
persons
of the reduction in size of the district. Following its creation, the district
developed a
roll-off site and a landfill site, incurred bonded indebtedness, assessed and
collected taxes
for services from district residents and was utilized by citizens of the district
and other
entities on a contract basis. Some five years after its creation, certain
disaffected
residents of the district challenged its creation contending that the county
commissioners
did not create the district in accordance with the resolution of intention because
the
boundaries of the district were reduced from those set forth in the original notice.
Hammermeister, 925 P.2d at 860. Citing Henderson, we affirmed the trial court's
conclusion that, given the public's reliance on the district for five years, the
Hammermeister plaintiffs were estopped from challenging the creation of the refuse
disposal district. Hammermeister, 925 P.2d at 862.
In both Henderson and Hammermeister, we stated that since there had been a
good
faith attempt to comply with the existing laws at issue (Henderson involved the
annexation
of a small school district to a larger school district), it could be found that the
respective
districts were de facto corporations, and, thus, not subject to collateral attack.
Henderson, 242 P. at 981; Hammermeister, 925 P.2d at 863.
Notwithstanding, rather than grounding our decisions in the de facto
corporation
theory, in each case we held that estoppel based on public policy grounds prevented
challenge to the existence of the districts in question. We concluded that declaring
the
districts at issue void after years of operation would throw public and private
rights into
considerable confusion and would impair the security of taxes levied, bonds issued
and
contracts entered into by the districts. Henderson, 242 P. at 981-82; Hammermeister,
925 P.2d at 863.
As previously noted, the Boards requested that the District Court declare the
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existing libraries to be legally constituted on either of two grounds: 1) the
libraries exist
as de facto public corporations or 2) the Commissioners should be estopped as a
matter
of public policy from challenging the existence of the libraries as county
libraries. We
address each ground separately.
First, the Boards contend that the Commissioners established a free public
library
under the library laws of the State of Montana in 1968, citing 44-211 to -215, -
218
to -228, RCM (1947), and the agreement between Teton County and the Great Falls
Library signed that year and renewed each year until 1990. The Boards concede,
however, that the statutes were not precisely followed.
In both Henderson and Hammermeister, while not grounding our decisions on the
de facto corporation theory, we did state that applicability of this doctrine was
premised
on an initial good faith attempt to comply with the governing statutory scheme. In
each
case, we concluded that there was a predicate good faith attempt to comply with the
existing, applicable law. Henderson, 242 P. at 981; Hammermeister, 925 P.2d at 863.
Thus, in order to determine whether the same predicate good faith attempt existed in
the
case at bar, it is necessary to examine the governing statutes in effect in 1968.
Section
44-211, RCM (1947) (enacted 1915; Sec. 11, Ch. 45, L. 1915; current version at 22-
1-
315, MCA), authorized the county commissioners to enter into a terminable contract
with
the board of trustees or governing authority of a free public library in another
incorporated city or town for the purpose of having this other library assume the
functions of a free public library in the county instead of establishing a separate
county
free library. The county commissioners were also authorized to fund this contract
from
the county free library fund under this section.
Two other statutory schemes relating to libraries were in existence in 1968.
Sections 44-212 to -215, RCM (1947), provided for library systems including library
federations or library networks. These statutes were originally enacted in 1939,
and are
collectively referred to hereafter as the "library system statutes." See 1939 Mont.
Laws
132. The remnants of these statutes are now included in Title 22, Chapter 1, part
4 of
the Montana Code.
As pointed out above, the 1967 Legislature also enacted 44-218 to -228,
RCM
(1947), which set up a statutory scheme by which counties and cities could establish
public libraries within their respective jurisdictions by resolution, by petition or
by
petition and election. These statutes provided for the appointment of a library
board and
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for levying of taxes by the governing body and addressed other matters regarding the
operations of the libraries and boards so created. These statutes are now codified
(with
subsequent amendments) at 22-1-301 to -314, MCA, and are collectively referred to
hereafter as the "public library statutes."
While the Boards cite to 44-211, RCM (1947), and to the library system
statutes
in both their petition and in their briefs before the trial court and on appeal, it
is clear
that their argument is actually premised on the Commissioners' alleged attempt to
comply
with the then newly enacted public library statutes in conjunction with the County's
execution of the 1968 Great Falls Library contract as the basis for their contention
that
the libraries were created as free public libraries in that year and were maintained
as such
thereafter. The fallacy of this argument, however, is that the record simply does
not
support a conclusion that what the Commissioners were attempting to do in 1968 was to
comply with the public library statutory scheme. At a minimum, these statutes
required
that the Commissioners pass and enter upon the minutes a resolution to the effect
that a
free public library was established, 44-219(1), RCM (1947) (enacted 1967; current
version at 22-1-303(1), MCA), and then that they appoint a five person board of
trustees to govern the operations of the county library so created, 44-221, RCM
(1947)
(enacted 1967; current version at 22-1-308, MCA).
In the instant case, what the Commissioners actually did in 1968 was to meet
with
the Librarian for the Great Falls Library with a view to contracting for bookmobile,
workshop and training services for the Community librarians to be provided by the
Great
Falls Library under auspices of the Pathfinder Library Federation. These meetings
culminated in the passage of a motion by the Commissioners authorizing the County to
enter into an Agreement for Library Services with the Board of Trustees of the Great
Falls Public Library dated September 5, 1968, to the end that the Great Falls Public
Library would "furnish library service also to the people of Teton County." While
this
agreement (and subsequent renewal agreements) detailed various services that the
Great
Falls Library was obligated to furnish to the people of Teton County and to the
individual
Community libraries for a sum certain which the County agreed to pay, there is no
indication whatsoever in either the minutes of the Commissionersþ meetings or in the
initial or renewal agreements that the Commissioners were actually attempting to
create
a county library under the public library statutes then in effect or as subsequently
amended.
The Commissioners never adopted a resolution to that effect as required by
44-
219(1), RCM (1947) (enacted 1967; current version at 22-1-303(1), MCA), nor did
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they ever appoint a five person county board of library trustees as required by 44-
221,
RCM (1947) (enacted 1967; current version at 22-1-308, MCA). Moreover, as
mentioned above, each of the Community city councils entered into separate agreements
with the Great Falls Library Board obligating their respective cities to provide
quarters
and utilities for their local library and to appoint a board of trustees in exchange
for
various delineated services to be provided by the Great Falls Library.
While the record does support a conclusion that the Commissioners intended to
assist the Community libraries with funding for the provision of federation library
services pursuant to 44-211, RCM (1947), and/or pursuant to the library system
statutes
then in effect, there is no persuasive evidence in the record that the Commissioners
intended to actually create a county library under the public library statutes.
Indeed, the
County's contract with the Great Falls Library for the provision of library
services, with
the County providing funding from tax levies and appointing a trustee to the advisory
Pathfinder Federation Board and with the local Community library boards appointed by
the city councils retaining autonomy, budgetary and administrative control over their
respective libraries fits neatly within the library system statutory scheme but not
at all
within the public library statutory scheme. Furthermore, there is nothing in the
library
system statutes that would lead to the conclusion that local governments utilizing
that
statutory scheme would, in so doing, thereby create a new county (or city) library
as a
legal entity where none existed before. In fact, if, as is stated in the 1968
contracts
between the individual Communities and the Great Falls Public Library, 44-211, RCM
(1947), was the statutory basis for the Commissioners' actions, this section
unequivocally
provides authority for the county to contract for library services "[i]nstead of
establishing
a separate county free library." Section 44-211, RCM (1947) (emphasis added).
In short, we conclude that there was no attempt--good faith or otherwise--by
the
Commissioners to create a county library by complying with the public library
statutes
enacted in 1967, nor was there even an intent on the Commissioners' part to utilize
this
statutory scheme for that purpose. Accordingly, the Boards' argument that the
existing
libraries meet the requirements for creation of a de facto public corporation under
either
Henderson or Hammermeister must fail.
We turn, then to the Boards' argument that, for public policy reasons, the
Commissioners are estopped from denying the existence of a county library under the
public library statutes. Again, the Boards rely on our decisions in Henderson and in
Hammermeister. In the latter case, we cited with approval the following language
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from
the former:
After a community has for years, as in the case at bar, exercised the
functions of a public corporation, its legal existence cannot be questioned
without causing disturbance more or less serious, and if the question of the
regularity of its organization can be kept open to collateral inquiry
indefinitely, no one can ever be secure in dealing with such entities, or be
sure that taxes levied, bonds floated, or contracts necessarily entered into
for the transaction of its business will be valid and enforceable. The
transaction of public business might be locked at any time at the will or
whim of a private individual and the credit of the corporation impaired or
destroyed. For these and other cogent reasons it is held that:
"An individual may be estopped by his conduct to attack the validity
of the incorporation of a municipality, even though, but for such estoppel,
he might do so." 28 Cyc. 175.
Thus acquiescence in the exercise of corporate functions, and dealing
with the corporation as such over a period of years will estop all persons
dealing with the corporation from assailing its legality. [Citations omitted.]
Hammermeister, 925 P.2d at 862 (quoting Henderson, 242 P. at 981-82) (alteration in
original).
We also pointed out:
[T]he estoppel here invoked is not, therefore, strictly an estoppel by
acceptance of benefits, but rather it is an estoppel based upon public policy,
because of the confusion into which a judgment, at this late date, that the
organization was void, would throw public and private rights and interests
acquired through years of operation with the acquiescence of the
inhabitants, and is therefore not dependent upon knowledge of the facts.
Hammermeister, 925 P.2d at 862-63 (quoting Henderson, 242 P. at 982) (alteration in
original). Accord Scilley v. Red Lodge-Rosebud Irr. Dist. (1928), 83 Mont. 282, 272
P. 543 (cited in Hammermeister, 925 P.2d at 863).
Again, the inapplicability of this public policy estoppel theory is apparent
from the
facts of the case before us. While for a number of years the Commissioners funded
library services to Teton County and assisted the Community libraries--for the most
part
via contract with the Great Falls Library--there never was created any sort of
"county
library" that exercised the functions of a public corporation or which had or which
purported to have a legal existence independent of the County itself. No such
professed
organization or entity floated bonds, levied taxes, entered into contracts,
purchased or
owned property or transacted public business. Indeed, each of the Communities owned
and maintained its own library facilities, appointed its own autonomous board of
trustees,
ran its own operations, transacted its own business and hired its own librarian.
While
the County provided the funding for these operations via a tax levy, and, from time
to
time, by providing revenue sharing, that, in an of itself, is a wholly insufficient
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basis on
which to judicially estop the Commissioners from denying the existence of an alleged
separate public corporation or legal entity with which no one dealt as such. The
public
policy reasons for application of the estoppel theory utilized in both Henderson and
Hammermeister are absent in the case before us on appeal. In fact, it would be a
dangerous, if not unlawful, precedent to effectively hold that a governing body
could, by
the passage of enough time, lose its ability to discontinue what was otherwise a
discretionary tax levy, simply because the public had become accustomed to the non-
mandated services that the tax levy funded. To apply the public policy estoppel
theory
in this case would be to create a county library from whole cloth. Estopping the
Commissioners from denying the existence of an entity that, but for some technical
irregularity in its formation, apparently exists as a separate legal organization
and
transacts business as such is one thing; using this theory to create the
organization in the
first instance is quite another. We hold that the public policy estoppel theory is
not
applicable in this case to preclude the Commissioners from denying the legal
existence
of the Community libraries as a county free public library.
We close with a final observation. Certainly no one can take comfort in
witnessing the death of a public library, whether small or large. As members of a
learned profession dependent upon the wisdom, the precedents and the laws reported in
books maintained with care in libraries, we take no joy in rendering this decision.
We
acknowledge that, for many of our citizens, the library is their only source of news,
information, knowledge, entertainment and social contact. Great civilizations have
given
birth to great libraries, and it may be said that, by no historical accident, the
demise of
libraries has preceded the decline of knowledge and literacy and has presaged the
collapse
of societies themselves.
The citizens of Teton County are not without a remedy, however. Title 22,
Chapter 1, part 3 of the Montana Code specifies the manner in which a public library
may be legally established and maintained in any county or city of this State. The
citizens of Teton County and of each of the Communities may yet save their libraries
by
petition or by petition and election. Sections 22-1-303(2) and (3), MCA. While the
courts may be powerless to save the libraries of Choteau, Fairfield and Dutton, the
residents themselves of these communities are not. As the District Judge wisely
noted
in his decision, the court of public opinion may yet prevail.
Affirmed.
/S/ JAMES C. NELSON
We Concur:
/S/ W. WILLIAM LEAPHART
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/S/ JIM REGNIER
/S/ TERRY N. TRIEWEILER
/S/ WILLIAM E. HUNT, SR.
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