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

file:///C|/Documents%20and%20Settings/cu1046/Desktop/opinions/97-110%20Opinion.htm (1 of 10)4/12/2007 12:22:33 PM
97-110



                        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


file:///C|/Documents%20and%20Settings/cu1046/Desktop/opinions/97-110%20Opinion.htm (2 of 10)4/12/2007 12:22:33 PM
 97-110


                                          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

 file:///C|/Documents%20and%20Settings/cu1046/Desktop/opinions/97-110%20Opinion.htm (3 of 10)4/12/2007 12:22:33 PM
 97-110


                                            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

 file:///C|/Documents%20and%20Settings/cu1046/Desktop/opinions/97-110%20Opinion.htm (4 of 10)4/12/2007 12:22:33 PM
 97-110


      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

 file:///C|/Documents%20and%20Settings/cu1046/Desktop/opinions/97-110%20Opinion.htm (5 of 10)4/12/2007 12:22:33 PM
 97-110


 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

 file:///C|/Documents%20and%20Settings/cu1046/Desktop/opinions/97-110%20Opinion.htm (6 of 10)4/12/2007 12:22:33 PM
 97-110


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

 file:///C|/Documents%20and%20Settings/cu1046/Desktop/opinions/97-110%20Opinion.htm (7 of 10)4/12/2007 12:22:33 PM
97-110


                                              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

file:///C|/Documents%20and%20Settings/cu1046/Desktop/opinions/97-110%20Opinion.htm (8 of 10)4/12/2007 12:22:33 PM
 97-110


                                          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

 file:///C|/Documents%20and%20Settings/cu1046/Desktop/opinions/97-110%20Opinion.htm (9 of 10)4/12/2007 12:22:33 PM
97-110


                                                               /S/ JIM REGNIER
                                                            /S/ TERRY N. TRIEWEILER
                                                           /S/ WILLIAM E. HUNT, SR.




file:///C|/Documents%20and%20Settings/cu1046/Desktop/opinions/97-110%20Opinion.htm (10 of 10)4/12/2007 12:22:33 PM
