                                    No, 12390

         I N THE SUPREME COURT OF THE STATE O M N A A
                                             F OTN

                                          1973



BlJRLINGTON NORTHERN, I N C , , a corpora t i o n ,
s u c c e s s o r i n i n t e r e s t t o G r e a t Northern
Railway Company, a c o r p o r a t i o n ,

                            P l a i n t i f f and A p p e l l a n t ,



RICHLAND COUNTY, e t a l . ,

                            Defendants and Respondents.



Appeal from:        D i s t r i c t Court o f t h e Seventh J u d i c i a l D i s t r i c t ,
                                            .
                    Honorable L. C Gulbrandson, Judge p r e s i d i n g .

Counsel o f Record :

     For Appellant:

             Gough, Booth, Shanahan and Johnson, Helena, Montana.
             Ward Shanahan a r g u e d , Helena, Montana.

     For Respondents:

             Edward J . B e l l , Helena, Montana
             Donald A . G a r r i t y a r g u e d , Helena, Montana.
             V. C. Koch, County A t t o r n e y , Sidney, Montana.



                                                      Submitted:        A p r i l 24, 1973

                                                         Decided : J&       1Q 1 9 ~
Filed :    JUL 19 f9B
Mr. Justice John Conway Harrison delivered the Opinion of the Court.

       Plaintiff here is Burlington Northern Inc., whose predeces-
sor filed three separate actions in 1969, 1970 and 1971, against
defendants Richland County, its officers, and the State Board of
Equalization.     By agreement of the parties, these actions were
consolidated because all concern the same basic facts. The
actions involve the payment of taxes under protest in the sum of
$336.06 for 1969; $650.72 for 1970; and $645.38 for 1971.
       The consolidated cases were submitted to the district court
of the seventh judicial district, Richland County, on the answers
to plaintiff's requests for admissions and on an agreed state-
ment of facts. The parties presented briefs and proposed findings
of fact and conclusions of law in May 1972, In August 1972, the
district court adopted the agreed statement of facts as the
court's findings of fact and concluded defendants were entitled
to judgment. After the court granted plaintiff's motion for a
stay of execution, plaintiff appealed.
       The pertinent facts, based on the agreed statement of facts,
are:
       1. The Sidney-Richland Airport is a joint city-county
airport established pursuant to the authority granted by section
1-821, W.C.M.    1947.   The board of county commissioners of Richland
County and the city council of Sidney passed resolutions which
created and provided financial support for the airport.
       2.   In October 1967, the Sidney-Richland Airport Commission
borrowed $100,000 from the Montana Aeronautics Commission. The
airport commission passed a resolution approving the loan. The
board of county commissioners also passed a resolution approving
the loan and obligating the county to repay the Montana Aeronautics
Commission $10,000 as its proportionate share of the loan.
       3.   In April 1969, the Sidney-Richland Airport Commission
borrowed an additional $100,000 from the Aeronautics Commission.
Again, the airport commission approved the loan by resolution.
The hoard of county commissioners passed a similar resolution and
further obligated Richland County to repay the Montana Aeronautics
Commission $10,000 as its proportionate share of the loan,
     Here, we note the loan approving resolutions seemingly limit
Richland County's obligation to repay the Montana Aeronautics
Commission to only $10,000. However, in actual fact, the total
loan amounts were $200,000 with interest at the rate of 3.5 percent
per annum on the unpaid balance, Plaintiff has calculated the
interest to be $19,250 for each loan over the repayment period.
The total amount due then is $238,500. Simple calculation quickly
indicates that the amount due each year on each loan over the ten
year repayment period exceeds $10,000. Further, the loan approving
resolution commits the county to repay this amount, as will be
discussed later in this Opinion.
     4,   Neither the original loan nor any of the annual county
levies imposed for the Sidney-Richland Airport were ever submitted
to or approved by the voters of Richland County.
     5.   For the years 1969, 1970, and 1971, Richland County has
levied not in excess of 1 112 mills   for the airport fund, The
majority of the funds acquired from the levy has been used to
repay the loans from the Montana Aeronautics Commission.
     The parties stipulated that the issue raised by the pleadings
and attendant documents was:   Does the use of the proceeds of the
airport fund levy to repay the loans to the Montana Aeronautics
Commission constitute a violation of Article XIII, Sec. 5, of
the Montana Constitution?
    Article XIII, Sec. 5, Montana Constitution, provides in
pertinent part:
     "No county shall incur any indebtedness or liability
     for any single pur ose to an amount exceeding ten
                        5
     thousand dollars ( 10,000) without the approval of
     a majority of the electors thereof, voting at an
     election to be provided by law."
     Plaintiff alleges the loan received by the Sidney-Richland
Airport Commission and approved by the county was in violation
of the above cited constitutional provision.   The county argues
that, by the language of the approving resolution, the county
indebtedness or liability is limited to $10,000 and it is therefore
not in violation of the constitutional provision.    We must agree
with plaintiff.   The approving resolutions of the county are but
a carefully constructed subterfuge to circumvent the constitutional
debt limitation. We do understand that the $10,000 limitation
established by ~ontana's 1889 Constitution may be outdated in
terms of modern spending power, but this cannot serve as an excuse
to ignore the plain language of the Constitution.
     The Sidney-Richland Airport Commission was created by Richland
County in cooperation with the city of Sidney, under authority
granted by the legislature in sections 1-801 through 1-828, R.C.M.
1947, commonly known as the "~unicipalAirports Act".     Section
1-803 provides that the county and city acting jointly may create
a board with the power to improve, equip, maintain and operate an
airport.   Section 1-821(d) lists the limitations on the exercise
of power by the joint board: ( ) expenditures of the joint board
                              1
shall be determined by a budget approved "by the governing bodies
of its constituent public agencies", meaning the governing bodies
of the county and city; (2) no acquisition can be made without
approval of the governing bodies; (3)   eminent domain proceedings
can only be instituted by authority of the governing bodies and
must be done in their names; ( ) the joint board may not dispose
                              4
of real property without consent of the governing bodies; and (5)
all police regulations must be approved by the governing bodies.
    With these enumerated controls and limitations by the county
and city over the airport commission, there can be no question that
the commission is an agent of the city and county.    In Kelleher
v, State of Montana and State Aeronautics Comm'n,       Mant   .     s

503 P.2d 29, 29 St.Rep, 897, this Court rejected the argument that
a n employee of a joirrr c i t y - c o u n t y a i r p o r t was an employee of
the s t a t e of Montana.          I n o t h e r words, t h e c i t y - c o u n t y a i r p o r t
commission was n o t an agent of t h e s t a t e of Montana.                           T h i s does
n o t mean, however, t h a t t h e c i t y - c o u n t y a i r p o r t commission i s n o t
an agent of t h e c i t y and county.                 On t h e c o n t r a r y , v i r t u a l l y a l l
a c t i o n s taken by t h e commission a r e c o n t r o l l e d and l i m i t e d by t h e
c i t y o f Sidney and Richland County; a l l r e s u l t s achieved by t h e
a i r p o r t commission a r e f o r t h e b e n e f i t of t h e c o n s t i t u e n t governing
bodies.
         I n t h e companion c a s e t o t h e i n s t a n t one, Burlington Northern,
Irr:   . v.   Flathead County,                Mon t   .           9          P. 2d              9 -


S t . Rep,            , we   determined t h a t t h e e x p e n d i t u r e          considered
t h e r e was, i n f a c t , an "indebtedness o r l i a b i l i t y " w i t h i n t h e
meaning of both t h e c o n s t i t u t i o n a l and s t a t u t o r y p r o v i s i o n s .         The
same r e a s o n i n g a p p l i e s here---the       l.oans and t h e i r repayment a r e
debts.        I n t h e companion c a s e w e c i t e d S t a t e ex r e l . Diederichs
v. Board of T r u s t e e s , 9 1 Mont, 300, 304, 7 P.2d 543, i n c o n s t r u i n g
t h e d e f i n i t i o n of "indebtedness o r l i a b i l i t y " .         That same d e f i n i -
t i o n applies here.
         Defendants h e r e also c i t e Diederichs i n support of t h e i r
c o n t e n t i o n t h a t Richland County i s n o t o b l i g a t e d t o repay the




                                                                      -
Montana Aeronautics Commission an amount i n excess of $ l 0 , 0 0 0 . ~
They contend t h i s i s so because t h e loan approving r e s o l u t i o n s
l i m i t t h e c o u n t y ' s p r o p o r t i o n a t e s h a r e of repayment t o $10,000.
However, t h e r e s o l u t i o n s approving both l o a n s a l s o c o n t a i n e d t h i s
language :
        "That t h e County of Richland, Montana, w i l l a
        and provide a p r o v i s i o n i n t h e budget of t h e S i ney-
        Richland A i r p o r t Commi.ssion of t h e City af Sidney,
        Montana, and t h e County of Richland. Montana, which
        w i l l make a v a i l a b l e f u n d s f o r t h e r&payrnent 6f s a i d
        l o a n i n t h e manner and form a s * * * s e t f o r t h , ''
        (Emphasis added),
There can be no doubt, a f t e s r e a d i n g t h e quoted language, t h a t the
county intended t h e loan t o be a d e b t on ehe courzty treasury over
a p e r i o d of y e a r s and t h e c o u n t y ' s budget was an i n t e g r a l p a r t of
t h e repayment schedule,
     In Diederichs, this Court quoting from State ex rel,
Diederichs v. State Highway Com., 89 Mont. 205, 211, 296 P.
1033, said:
      11 1
       Knowing the tendency of governments to run in
     debt, to incur liabilities, and thereby to affect
     the faith and credit of the state in matters of
     finance, thus imposing additional burdens upon the
     taxpaying public, the framers of the Constitution
     placed positive limitations upon the power of the
     Legislative Assembly to incur a debt or impose a
     liability upon the state beyond the limit prescribed,
     without referring the proposition to the electorate
     far its approval. As to this, the comprehensive
     language of the section leaves no doubt. II
We find that language equally applicable here.
     In the instant case, there is a debt upon the county of
Richland in excess of the constitutional limitation prescribed
in Article XIII, Sec. 5, Montana Constitution.
     The cause is reversed and remanded to the district court
for entry of judgment for plaintiff.
                                      n




...................................
   Associate Justices.
Mr. Justice Frank I, Haswell specially concurring:
     I concur in the result, but not in all that is said in
the foregoing opinion, I specifically disagree with statements
therein suggesting that the companion case, Burlington Northern
Inc, v, Flathead County,      Mont ,      Y      P. 2d         9-



St.Rep.        is controlled by the same constitutional debt
limitation proscription as this case, In my view the two cases
are clearly distinguishable for the reasons given in my dissent
in Flathead County,



                                    Associate Justice

Mr, Justice Gene B. Daly specially concurring:
     I concur with the foregoing statement of Mr. Justice
Frank I. Haswell.                        -4              f-;

                                ,
                                .   Associate Justice,              (
