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District Court of Appeal, Third District, California.

WAHL v. WATERS et al. (WANNOP, Intervener).*

Civ. 5732.

Decided: July 10, 1937

Coyle E. Bybee, of Chico, and Dion R. Holm, of San Francisco, for appellants. Grayson Price, of Chico, and Elliott, Atkinson & Sitton, of Sacramento, for petitioner and respondent. Devlin, Devlin & Diepenbrock, of Sacramento, for intervener and respondent.

Respondents in the court below, the appellants here, constitute the board of directors of the Bidwell Municipal Utility District, which was organized under the provisions of an act generally known as the Municipal Utilities District Act of 1921. Stats.1921, p. 245, as amended, 2 Deering's Gen.Laws of 1931, Act No. 6393. The election creating the district was held on August 28, 1934, and the organization of the district was reviewed by this court in Morrison v. White, 10 Cal.App.(2d) 261, 52 P.(2d) 261, and Id., 10 Cal.App.(2d) 266, 52 P.(2d) 263. The question of payment by the county to the district of taxes collected for its benefit by the county was before this court in a proceeding prosecuted by the district against the auditor of the county of Butte. Bidwell Mun. Utility Dist. v. Knott, 16 Cal.App.(2d) 432, 60 P.(2d) 588, 589. It was there contended that, because of the pendency of the present action, such taxes should not be paid over to the district. This court held the position not well taken, and stated the basis of the present proceeding as follows:

“In October, 1935, the qualified electors and property owners in the utility district signed and filed with the directors of the district a petition demanding that they call an election for the purpose of dissolving the district. The directors failed to call the election. A petition for a writ of mandamus was thereafter presented to the superior court of Butte county to compel the calling of the election. Upon hearing that petition for a writ of mandamus, the trial court determined that the petition for an election was defective and the writ was denied. In December, 1935, a second petition was signed and filed with the directors by the electors of that district again urging the calling of an election to dissolve the district. The directors failed and refused to comply with the second petition. An election has not been called. A second petition for a writ of mandamus to require the calling of an election for that purpose was filed. The court held that the writ should issue and instructed the directors to call the election as prayed for. Judgment in that proceeding was rendered May 14, 1936. From the last–mentioned judgment the district has appealed.”

The appeal last mentioned is now before us here. The respondents on this appeal are William W. Wahl, the petitioner in the court below for the writ, and John Wannop, who was permitted to intervene in support of petitioner.

The proceedings to effect a dissolution of the district are based upon section 28, which was added to the Municipal Utilities District Act in 1933. Stats.1933, p. 2551. So far as is pertinent here, that section provides that the board of directors “of any district which operates no works or properties” may at any time, and upon the filing with the secretary of the district of a petition signed by the designated number of qualified electors, must, call an election submitting to the electors of the district the question whether the district should be dissolved.

There are therefore two conditions that must exist before the directors of the district may be compelled by mandate to call the election for dissolution. The district must be one which “operates no works or properties,” and there must be a petition bearing the requisite number of signatures.

The application for the writ of mandate herein was filed on February 20, 1936, and it is therein alleged that “said district has not at any time since the organization operated and does not now operate any works or properties,” and also that “on the 6th day of December, 1935, there was filed with the Secretary of said district, a petition signed by qualified electors of said district, equal in number to more than 25% of the votes cast within said district at the general State election next preceding the date of filing of said petition, asking that the question of the dissolution of said district be submitted to a vote of the electors of said district”.

The statute provides that the election for dissolution of the district “shall be held within sixty days next succeeding the date on which the petition was filed.” Notice of the election is required by publication in a newspaper for two weeks, or, if there be no newspaper published in the district, then by posting for fourteen days. The petition here having been filed with the board of directors on December 6, 1935, the sixty–day period fixed by the statute within which the election should be held had expired before the application for the writ was made herein on February 20, 1936. But the provision in the statute for the time of election is directory only, as was said in Cake v. City of Los Angeles, 164 Cal. 705, 130 P. 723, 725: “It is a general rule of construction that the word ‘shall’ when found in a statute is not to be construed to be mandatory, unless the intent of the Legislature that it shall be so construed is unequivocally evidenced.”

Here we have no declaration in the statute prescribing the time within which the election should be held that the word “shall” is of mandatory import. There are no negative words forbidding the holding of the election after the time fixed; nor is authority to hold the election after the prescribed time withdrawn; nor is the right to compel an election lost to the petitioners by the failure of the board of directors to hold it within that time. On the filing of the application for the writ herein it therefore was still within the province of the officers of the district to call an election pursuant to the petition therefor.

From the minutes of the proceedings of the directors of the district, which minutes are in evidence, it appears that eleven meetings of the board were held between the date of the filing of the petition on December 6, 1935, and the filing of the application for the writ herein on February 20, 1936. The meeting next preceding the latter date was held on February 14, 1936, and therefrom it appears that at that time the checking by the secretary of the signatures on the petition was still in progress and had not been completed. No determination of the sufficiency of the petition had been made at the time the application for the writ herein was filed. It does appear from the minutes that on January 4, 1936, the board of directors “decided that no action be taken because the District is now operating works and property.” However, two days later the decision to take no action was by implication rescinded by an order that the secretary of the board be “authorized” to check the signatures in the petition “with affidavits of registration and report to the Board as to its sufficiency.”

The respondents below interposed a demurrer to the application for the writ. The principal grounds of demurrer were want of jurisdiction, another action pending, and misjoinder of parties defendant. The claim of lack of jurisdiction was predicated upon the premise that the board of directors had acted on the petition, and it was contended that such determination was exclusive. A complete answer to this contention is that the board of directors had made no determination at the time the application for the writ was filed. The plea of another action pending may not be raised by demurrer unless it appears on the face of the application for the writ that there is another action pending. Section 430 of the Code of Civil Procedure limits a demurrer to defects appearing on the face of the complaint. See, also, Fassett v. Nascimiento, 108 Cal.App. 14, 291 P. 269, and 21 Cal.Jur. pp. 94, 95. The demurrer raised also the question of misjoinder of parties defendant. It is contended that the district should have been joined in the proceeding. No authority is cited by appellants. In 16 California Jurisprudence, page 857, it is said: “Where the duty sought to be compelled is enjoined upon a board as such, the proceeding should be against the board, although the better practice seems to be to name the individual members in addition to the board.”

Section 28 of the act here involved makes it the duty of the “board of directors” to call the election. The respondents designated in the application for the writ herein are certain named individuals, and following their names appears the following: “as the directors and the Board of Directors, of the Bidwell Municipal Utility District.” This is sufficient.

We find no merit in the demurrer to the application for the writ.

The allegations of the application clearly show that at the time the application was filed there was the duty incumbent on the board of directors to call the election for dissolution of the district, and therefore, if those allegations are sustained by proof, the writ must issue. Kentfield v. Reclamation Board, 137 Cal.App. 675, 31 P.(2d) 431.

The answer to the application denies the filing of a sufficient petition, and denies also that the district operates no works or properties. The petition, consisting of sixty sections, and also the records of the county clerk necessary to determine the sufficiency of the signatures, were admitted in evidence. The parties stipulated as to the number of signatures necessary.

The appellants allege in their answer, as a defense to the application for the writ, that, for reasons stated in a certificate made by its secretary to the board of directors, many of the signatures to the petition to call an election are not valid, and that the petition was therefore not signed by qualified electors equal in number to not less than 25 per cent. of the votes cast within the district at the next succeeding general state election. Aside from the original petition, the registration records of the county clerk, the certificate of the secretary referred to in the answer, and the resolution of the board adopting the same, no evidence was offered or admitted as to the validity or sufficiency of the signatures; nor, aside from the certificate of the secretary and the resolution of the board, was there any evidence that the signatures were not valid or sufficient. The court below found that the petition bore sufficient valid signatures. Appellants contend that this finding is not supported by the evidence, for the reason that the only evidence on the question of the validity of the signatures was that afforded by the certificate of the secretary of the board of directors which found to the contrary and the resolution of the board declaring the petition insufficient.

While the determination by the board in a case such as this, as to the sufficiency of the petition, is ordinarily final and conclusive, and the court may not go behind the action of the board, except in case of fraud (People v. San Diego, 71 Cal.App. 421, 236 P. 377), it is also true that, where an official body acts arbitrarily, its action is subject to control by mandate. In Hartsock v. Merritt, 93 Cal.App. 365, 269 P. 757, the court said: “It is the duty of the city clerk to examine the individual certificates, for the purpose of ascertaining whether they comply with the requirements of the charter, and, if a sufficient number of valid certificates are filed, he must certify that fact to the council, and the election must then be called. * * * The citizen is entitled to have this duty performed honestly and fairly, and, if it is shown to have been done fraudulently or arbitrarily the action may be controlled by mandamus.”

Furthermore, in their answer appellants not only alleged that the board of directors found the petition to lack sufficient signatures, but also set out the reasons why it so found. The case therefore comes within the rule laid down in Puterbaugh v. Wadham, 162 Cal. 611, 123 P. 804, 805, where the court said: “It is undoubtedly true that the writ of mandamus is not a writ of error, and that, generally speaking, it is not available for the purpose of altering or varying in any particular the finding of a judicial or quasi judicial body or officer acting within its or his appropriate jurisdiction; but where the facts are not disputed, and the only matter to be determined is the duty of the body or officer under the law, the court will define such duty and enforce not only its performance, but the carrying out of the obligations of the respondent body or officer in a particular manner.”

The court may therefore inquire into the facts on which the board based its conclusion. It was stipulated at the trial that all the sections of the petition contained an aggregate of 2,998 signatures; that 1,982 was the requisite number to compel the calling of an election; and that only such objections were made to the petition as are recited in the certificate of the secretary on which the resolution of the board of directors as to the insufficiency of the petition was based. These objections were ten in number, eight of them in the aggregate affected only 503 signatures, and, if all are invalid, there would still remain signatures sufficient in number. The two remaining objections were: (1) That 1,163 of the signatures appear upon the prior petition of October 10, 1935, already referred to; and (2) that 2,218 signers had failed themselves to write the name of the precinct following their own names. If either of these objections are valid, the petition did not carry names sufficient in number, and the conclusion of the board of directors that the petition was not signed by the number of qualified electors required by the statute is justified by the facts on which the conclusion was based.

Appellants cite no authority justifying the exclusion of signatures to a petition previously filed and for a like purpose. The case of Morrow v. Board of Directors, 219 Cal. 246, 26 P.(2d) 292, indicates that the law is to the contrary. Section 28 of the act requires that the petition be signed by “qualified electors.” Even though the signers had signed a previous petition, they were still “qualified electors” and that is all the statute requires. They do not lose their status as qualified electors by having signed a petition in a like but separate and distinct proceeding.

As to the necessity that each signer of the petition, himself add the name of his precinct, it is to be noted that section 28 of the act in question contains no provision as to signatures except as to the number thereof and that the signatures must be those of qualified electors of the district. There is no requirement that either the residence or the precinct of the signers be stated. However, section 1083a of the Political Code as amended in 1933 (Stats. 1933, p. 2471) provides that, whenever any petition is by the law of this state required to be signed by qualified electors, only an elector who is a registered qualified elector at the time he signs such petition shall be entitled to sign the same, and “each signer must at the time of so signing such petition * * * himself affix thereto his place of residence, giving street and number if either exists, and if no street or number exists, then such designation of the place of residence as will enable the location to be readily ascertained, also the date of such signing.” The amendment of 1933 to section 1083a of the Political Code added the word “himself” to the provision requiring the signer to add his place of residence. The same amendment also omitted from section 1083a of the Political Code the requirement that “such signer shall at the time of so signing such petition or paper affix thereto the precinct.” It would appear therefore that since the amendment of section 1083a of the Political Code it is essential that the signer of a petition such as is here under consideration must himself write after his name, his place of residence, and the date of signing, but that no requirement exists that the precinct also be stated. The language of section 1083a of the Political Code is not the same as that of section 273 of the Los Angeles city charter (Stats. 1927, p. 2016), which was involved in Ley v. Dominguez, 212 Cal. 587, 299 P. 713. In Mayock v. Kerr, 216 Cal. 171, 13 P. (2d) 717, the designation of the precinct was held necessary on an initiative petition because of the language of the State Constitution (Const.art. 4, § 1). In Gerth v. Dominguez, 1 Cal.(2d) 239, 34 P.(2d) 135, were involved petitions seeking the recall of members of the Los Angeles city board of education, and it was sought to reject signatures following which were precinct numbers incorrectly designated. Section 290 of the Los Angeles City Charter (Stats.1925, p. 1118) provides that the mode of signing recall petitions shall be the same as that required in the case of initiative petitions. Section 273 of the charter (Stats.1927, p. 2016) required that the number of the election precinct of each signer of an initiative petition appear on the paper after his name. In Gerth v. Dominguez, supra, the court held that the city clerk of Los Angeles was justified in refusing to accept petitions wherein the name of the election precinct of the signer did not appear, but permitted the sponsors of the petitions to supply the omission.

The situation here is entirely different from that existing in the cases above referred to. Section 28 of the act does not require any statement of the precinct wherein the signer is an elector. Section 1083a of the Political Code is likewise silent as to the designation of the precinct. Article 4 of the Constitution, which requires the addition of the precinct, applies only to initiative and referendum petitions.

The requirement of section 1083a that the signer must himself affix his place of residence does not mean that he must also add the name of his voting precinct. We construe the law to be that on the petition here involved each signer must be a qualified elector of the district, and must following his signature himself add his place of residence, but that no statement of the precinct is required. There is here no contention that each signer did not himself add his place of residence following his name. An examination of the original petition discloses that following each signature is the place of residence of the signer, generally indicated by street and number or rural delivery route

The appellants having in their answer alleged not only that the petition carried an insufficient number of valid signatures, but also having set forth the facts on which the conclusion of insufficiency was based, the court was justified in testing the soundness of the conclusion, and having found that it was not warranted by the facts on which it was based, to reject it. The finding that the petition carried a sufficient number of signatures of qualified electors is therefore sustained.

The trial court heard evidence on the question as to whether the district was “operating works or properties,” and permitted evidence impugning the good faith of the appellants. Of this appellants complain. In view of the conclusion we have reached, it is not necessary to determine here whether the finding of the board that the district was “operating works or properties” is conclusive, nor whether, under the state of the pleadings, evidence of lack of good faith was properly admitted.

It is our view that the district was in fact “operating works or properties” within the meaning of section 28 of the act. The phrase “operating works or properties” has received no judicial construction.

In seeking for an interpretation of these words, it is well to examine into the history and activities of the district. The election resulting in the organization of the district here involved was held on August 28, 1934, and the vote canvassed on September 3, 1934. The members of the board of directors selected at that election qualified, and on September 18, 1934, held their organization meeting, at which the board adopted a resolution fixing the boundaries of wards or subdistricts for the purpose of electing directors to succeed those selected at the election creating the district. At the same meeting, Ordinance No. 1, providing for notice of election of directors was introduced, and a resolution adopted prescribing the conduct of the business of the district; also a temporary office established, and the time of meetings fixed for 8 o'clock p. m. on the first Wednesday of each month. Two further meetings were held in September, 1934, and thereafter at least one, and frequently several, each month, until the filing of the application for a writ herein. On October 3, 1934, the president of the board of directors and the attorney for the district reported concerning a conference had with certain persons relative to the financing of the district, and also relative to a consultation with a utility engineer concerning an appraisal of the electric system in the district. At the general election on November 6, 1934, directors to serve for the ensuing term were chosen. On November 27, 1934, arrangements were made with an electrical engineer for a preliminary survey of the district. On December 5, 1934, a resolution was adopted to secure certain data from the railroad commission. In the minutes of December 5, 1934, appears a reference to the appeals in the cases of Morrison v. White, 10 Cal.App.(2d) 261, 52 P. (2d) 261, and Id., 10 Cal.App.(2d) 266, 52 P.(2d) 263. These appeals were decided on November 19, 1935. Notwithstanding the pendency of this litigation, the board of directors held meetings and transacted business. Among the matters discussed at these meetings was a proposal to validate the organization of the district by an act of the legislature at its 1935 session; also there was adopted a resolution authorizing the assessment and collection of district taxes by the county officials; and a resolution authorizing negotiations with the water project authority of the central valley project. On March 20, 1935, a committee was appointed to confer with the Pacific Gas & Electric Company, with a view to purchasing its distributing lines in the district, and the Centerville power house, but the company refused to consider a sale. On May 17, 1935, a resolution was adopted authorizing the execution of a contract with one C. R. Reid, relative to the acquisition and construction of a power system, and such contract was executed on June 22, 1935. At the time fixed by law a budget was adopted and the tax rate fixed. On August 10, 1935, the electrical engineer employed by the district was directed to prepare general detailed plans and specifications and estimates of cost for a power system for the district. On September 9, 1935, a resolution was adopted authorizing the secretary of the board to execute and file an application with the Federal Emergency Administration of Public Works for a grant to aid in financing the construction of an electrical generating plant and distributing system. In the minutes of September 11, 1935, appears a reference to a movement by certain persons to call an election to dissolve the district. The record herein shows that on October 10, 1935, a petition to that end was filed, and on November 15, 1935, the board found the petition insufficient, which finding was thereafter confirmed by the court in a mandamus proceeding.

On September 10, 1935, specifications for a Diesel engine–drive electric unit were ordered prepared by the engineer of the district, and on October 18, 1935, a resolution adopting instructions for bidders was adopted; on the preceding day there had been adopted a resolution fixing a prevailing wage rate for the district in connection with a generating unit to be purchased and constructed. On October 24, 1935, the board entered upon an investigation of the Durham waterworks with a view to leasing the same. On October 28, 1935, the board, having concluded to lease said plant, adopted a resolution authorizing the filing of an application with the Railroad Commission permitting such lease, and also authorizing the execution of such lease if such permit was granted. On November 30, 1935, a lease by the district of certain real property in the town of Durham was authorized by the board and the matter of drilling a well on the property was authorized, and a water pressure tank, gas engine, pump, and pipe line to serve ten consumers was purchased. The new water plant was designated as “Durham Plant No. 1.” On December 4, 1935, a schedule of rates for sales and service of water was adopted. On December 6, 1935, the petition was filed to call an election, on which petition this proceeding is based.

The foregoing is a résumé of the activities of the appellant board of directors so far as the minutes disclose, from the organization of the district to the time of the filing of the petition to call the election involved in the present proceeding.

During a portion of this time there were pending two actions to declare invalid the organization of the district. The time at which these were instituted does not appear, although in the minutes of December 5, 1934, there is a reference to the pendency thereof. Both were decided in this court on November 10, 1935, and in one a petition for hearing in the Supreme Court was denied on January 16, 1936. On October 10, 1935, a petition to call an election to dissolve the district was filed, and following the rejection of that petition by the board of directors on November 15, 1935, an application for a writ of mandate, similar in purpose to that here involved, was made, and that proceeding was still pending when the answer of appellant was filed herein, although later the writ was denied.

To recapitulate: The district was created by the election on August 28, 1934; organization of the board of directors was effected on September 18, 1934; prior to December 5, 1934, two actions to void the creation of the district were instituted, and one of these was not terminated until January 16, 1936. The record shows also that the district was without funds until January 6, 1936, on which day the first one–half of the 1935–36 taxes were paid to the treasurer of the district.

It may be conceded that the efforts of the appellants were in the first instance directed toward the development and distribution of power, and that the development and distribution of water was later determined on, in order to remove any doubt as to the classification of the district as one “operating works and properties.” Without funds, the district could neither purchase nor construct facilities whereby it might supply either power or water to the inhabitants of the district. Pending litigation, wherein the validity of the creation of the district was involved, forbade the incurring of any substantial indebtedness. Obviously, if water were made the subject of its activities, facilities to supply the inhabitants could be more readily provided, and at less expense, than if a power plant, generating unit and distribution system for electric power were to be constructed. The district was compelled to restrict its activities to its financial capacity. In this there was neither fraud nor lack of good faith.

We do not believe that so narrow a construction may be placed on the words “operates no works or properties” as respondents on appeal contend. The validity of the organization of the district was in question until January 16, 1936, and, if an election could be compelled to dissolve it prior to that time, such election could likewise be compelled immediately following the organization, and before the district had an opportunity to engage in any activities whatever.

To construe section 28 of the act so as to make it possible to require an election for the dissolution of the district to be called immediately upon its formation, and before the district had an opportunity to function at all, would be an unreasonable interpretation of the statute, and one that would lead to an absurdity. Under such a construction, a district might be formed, and thereupon a petition to call an election immediately filed, and during the pendency of such proceedings the district would, of course, be unable to finance either the construction or purchase of facilities for operating a utility. The purpose of the law which provides for such an organization would thus be seriously impaired by the will of a comparatively minor portion of the electorate.

It was the evident intent of the Legislature to make provision for the formation of municipal utility districts, and it could not have been its purpose by the enactment of section 28 to have practically denied that right. To aid in a reasonable construction of the words “operates no works or properties,” the court is justified in inquiring into the extent of the activities of the district under existing circumstances. In other words, in construing said words, there must be kept in mind the limitation upon the activities of the district officials arising out of the litigation and other proceedings having a reasonable tendency to restrict such activities.

Section 3542 of the Civil Code provides that “interpretation must be reasonable.” The language of a statute must be given a reasonable interpretation and one compatible with common sense. 23 Cal.Jur., p. 722. It is presumed that the Legislature in enacting a statute intended to act in accordance with reason. 23 Cal.Jur., p. 781. A statute should receive a sensible construction, one that will not lead to an absurd consequence. Bayonne T. Corporation v. American F. of S. W., 116 N.J.Eq. 146, 172 A. 551, 92 A.L.R. 1450. The interpretation of the words “operates no works or properties” as used in section 28 calls for the exercise of that faculty which Mr. Chief Justice White of the Supreme Court of the United States (Standard Oil Co. v. U. S., 221 U.S. 1, 31 S.Ct. 502, 55 L.Ed. 619, 34 L.R.A.[N.S.] 834, Ann.Cas.1912D, 734), in discussing the meaning of the word “reasonable” in the Sherman Act (15 U.S.C.A. §§ 1–7, 15 note), as “practical common sense.” Beck v. Ransome–Crummey Co., 42 Cal.App. 674, 184 P. 431. In Universal P. Corporation v. Superior Court, 9 Cal.App.(2d) 490, 50 P.(2d) 500, 502, the court said: “And it has been decided, not only that the language of a statute must be given a reasonable interpretation, but that every statute as a whole must be so construed, and thus, when opportunity arises, made compatible with common sense and the dictates of justice.”

It would appear that it would be unreasonable to hold that, where the district was finally validated on January 16, 1936, a petition calling for an election filed on December 6, 1935, could be sustained, based upon the fact that the district did not operate works or properties, when as a matter of fact the district was as active in taking initial steps to accomplish that end as were the respondents below.

A reasonable construction of the phrase “operates no works or properties” would seem to restrict its application to districts which have been created, and failed to take steps to effect the purpose of their organization, or which have ceased operations once entered upon. In our opinion, a determined and continuous effort to carry out the purposes for which it was created renders all that it legitimately done toward that end by the district a step in the operation of works and properties. The extent of the activities of the district in developing and distributing water is not material here. The things done by the board of directors here, looking toward the furnishing of power to the inhabitants of the district, were included in the operation of works and properties. The district at the time the petition was filed was one operating works or properties, and therefore not a district which comes within the terms of section 28 of the Municipal Utilities District Act.

The judgment is reversed.

HELD, Justice pro tem., delivered the opinion of the court.

We concur: PULLEN, P. J.; PLUMMER, J.

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