STATE ex rel. TOWN OF NICHOLS HILLS v. WILLIAMSON

STATE ex rel. TOWN OF NICHOLS HILLS v. WILLIAMSON
1936 OK 449
60 P.2d 1036
177 Okla. 529
Case Number: 27141
Decided: 06/16/1936
Supreme Court of Oklahoma

STATE ex rel. TOWN OF NICHOLS HILLS
v.
WILLIAMSON, Atty. Gen.

Syllabus

¶0 1. MUNICIPAL CORPORATIONS - Two Methods of Refunding Bonded Indebtedness.
Section 1, art. 6, ch. 32, S. L. 1935, provides two methods by which a municipality may refund certain of its outstanding bonded indebtedness: (1) By agreement and exchange of the refunding bonds for those refunded, and (2) by sale of the refunding bonds and payment of those refunded with the proceeds of such sale.
2. SAME - Prerequisites to Ordinance or Resolution Authorizing Issuance of Refunding Bonds.
A municipal ordinance or resolution passed by authority of section 2, art. 6, ch. 32, S. L. 1935, authorizing the issuance of refunding bonds, must be enacted in contemplation of a valid agreement to exchange said bonds for the bonds refunded or a bona fide cash bid therefor, as provided by section 1 of said act, and the Attorney General, as ex officio bond commissioner, may withhold his approval of such bond issue in the absence of such agreement or bid.
3. SAME - Authority of Municipal Treasurer to Deal with Sinking Fund Investments - Limitations.
Under the sinking fund investment statutes, the authority of a municipal treasurer to deal with the sinking fund investments is limited to that expressly granted by statute or which may arise therefrom by necessary implication.
4. SAME - Agreement of Treasurer to Accept Municipality's Refunding Bonds for Bonds Refunded Held not Authorized.
The only implied power granted to a municipal treasurer by the sinking fund investment statutes is the power to collect the obligations held by him as sinking fund investments, and his agreement with a municipality to accept its refunding bonds for others of its bonds refunded, and held by such treasurer as investments, does not constitute a necessary step in the collection of such obligations and is therefore unauthorized and void.

Original action for writ of mandamus by the Town of Nichols Hills against Mac Q. Williamson, Attorney General. Writ denied.

Hayes, Richardson, Shartel, Gilliland & Jordan, for relator.
Mac Q. Williamson, Atty. Gen., and Stephen D. Holloway, for respondent.

GIBSON, J.

¶1 This is a companion case to No. 27142, State ex rel. Town of El Dorado v. Mac Q. Williamson, Attorney General, 177 Okla. 526, 60 P.2d 1032. Here the town of Nichols Hills seeks a writ of mandamus directed to the Attorney General requiring him to approve certain refunding bonds issued by said town pursuant to the provisions of article 6, ch. 32, Session Laws 1935.

¶2 The present case involves the same legal questions as were involved in No. 27142, this day decided. Here, as there, we have the questions of the validity of the bond issue; and the validity of the county treasurer's agreement with a debtor municipality to accept its refunding bonds in lieu of the bonds representing the same obligation and held in the county sinking fund; and the Attorney General's duties with regard to approval of such bonds. The syllabus in that case is here adopted.

¶3 With reference to the aforementioned county treasurer's agreement, however, we have here the additional fact that the refunding bonds bear a lesser rate of interest than do the bonds he has agreed to surrender. We think this fact alone renders the agreement void. There exists no statutory authority, express or reasonably to be implied, whereby a county treasurer may enter into a valid agreement to exchange one security for another bearing a lesser rate of return. That, in effect, would permit the officer to remit a portion of the obligations held as sinking fund investments.

¶4 The agreement is therefore void, not alone for the reason that the exchange of securities does not fall within the implied powers of the treasurer as constituting a necessary step in the collection of the debt, but as being an attempt to remit a portion of the obligations due the sinking fund.

¶5 The Attorney General was therefore justified in withholding his approval of the bond issue, and the writ should be denied. Writ denied.