DISTRICTS ‑- SCHOOLS ‑- BOARD OF DIRECTORS ‑- CONFLICT OF INTEREST ‑- EMPLOYMENT OF DIRECTOR OR SPOUSE AS A TEACHER ‑- CERTIFICATION

DISTRICTS ‑- SCHOOLS ‑- BOARD OF DIRECTORS ‑- CONFLICT OF INTEREST ‑- EMPLOYMENT OF DIRECTOR OR SPOUSE AS A TEACHER ‑- CERTIFICATION.

(1) and (2) Chapter 42.23 RCW and specifically RCW 42.23.020 prohibits the employment of either a school director or his wife for compensation except as specifically provided in the act.

(3) A proviso of RCW 42.23.030 allows the employment of a school director or his wife in school districts other than districts of the first class, up to certain maximum amounts, ($200) which amount is measured by the total liability of the district under the contract or contracts at the time they are executed and not by the size of monthly installments into which the contract may be divided for subsequent payment.

(4) No individual may be employed by a school district as a teacher, whether on a full-time, part-time, or "substitute" basis, unless such individual has a valid teacher's certificate as required by § 1, Article VII, subchapter 4, chapter 97, Laws of 1909 (cf. RCW 28.67.010).

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                                                                October 23, 1962

Honorable Roger L. Olson
Prosecuting Attorney
Franklin County
Pasco, Washington

                                                                                                              Cite as:  AGO 61-62 No. 174

Dear Sir:

            By letter, previously acknowledged, you have requested the opinion of this office on several questions, which we paraphrase as follows:

            1. May a school director in a district, other than a first class district, act as a substitute school teacher, for compensation?

            2. May the wife of a school director in a district, other than a district of the first class, act in the capacity of a full-time or part-time teacher, for compensation?

            3. If either of the first two questions is in the affirmative, may the individual be employed under a contract for compensation amounting to more than $200 in a given school year, payable at a rate of less than $200 per month?

             [[Orig. Op. Page 2]]

            4. May a district employ as substitute or part-time teacher an individual who does not have a teacher's certificate?

            The answers to both questions (1) and (2) will be found in the analysis.  We answer questions (3) and (4) in the negative.

                                                                     ANALYSIS

            As a background to your first and second questions you point out that formerly this office interpreted RCW 28.58.290 as requiring a negative answer to the question of whether or not the wife of a school district director could work for the school district, for compensation.  (AGO 47-48:18e [[1947-48 OAG 18e]]to prosecuting attorney of Ferry County, March 10, 1947.)  However, this statute was repealed by the legislature during its 1961 session, and the legislature enacted in its place chapter 268, Laws of 1961.  The applicable statute is now RCW 42.23.030 which, in so far as material here, makes the following provision and exemption:

            "No municipal officer shall be beneficially interested, directly or indirectly, in any contract which may be made by, through or under the supervision of such officer, in whole or in part, or which may be made for the benefit of his office, or accept, directly or indirectly, any compensation, gratuity or reward in connection with such contract from any other person beneficially interested therein.  This section shall not apply in the following cases:

            ". . .

            "(5) The employment of any person by a municipality, other than a county of the first class or higher, a city of the first or second class, or a first class school district, for unskilled day labor at wages not exceeding one hundred dollars in any calendar month; and any other contract in such a municipality except a sale or lease by the municipality as seller or lessor:  Provided, That the total volume of business represented by such contract or contracts in which a particular officer is interested, singly or in the aggregate, as measured by the dollar amount of the municipality's liability thereunder, shall not exceed two hundred dollars in any calendar month: . . ."

             [[Orig. Op. Page 3]]

            A discussion of this statute and its total application will, we believe, resolve both those questions and we will therefore proceed to treat them as one general question, in that manner.

            The statute begins by prohibiting flatly, in general, direct or indirect interests by public officers in public contracts, where the officer occupies a certain relationship to the public contract.  The purpose and policy of such statutes would seem to be self-evident, but for emphasis we refer to the opinion of the supreme court of Washington in Northport v. Northport Townsite Co., 27 Wash. 543, 549, 68 Pac. 204 (1902).  After stating the principle that officers of a corporation cannot enter into contracts with the corporation or derive any benefit from such contract, the court said:

            "Long experience has taught law makers and courts the innumerable and insidious evasions of this salutary principle that can be made, and therefore the statute denounces such a contract if a city officer shall be interested not only directly, but indirectly.  However devious and winding the chain may be which connects the officer with the forbidden contract, if it can be followed and the connection made, the contract is void.  It would seem that the interest of a stockholder of a corporation brings such stockholder within the reason of the rule prohibiting an officer from being interested in the city's business.  [Citations omitted]"

            The supreme court has also held, in State v. Miller, 32 Wn. (2d) 149, 201 P. (2d) 136 (1948), that the employment of an officer's spouse falls within the same prohibition (based upon Washington community property law), under a statute substantially identical to that we are now considering.  See, RCW 42.20.010 which, incidentally, was cited in our March 10, 1947, opinion.  Again, for emphasis, we quote from page 152 of the court's opinion stating:

            ". . . Public policy, as indicated in the statute, demands that a public official receive from the public treasury only the amount provided for his salary."

            Up to this point, then, our opinion must be identical to the 1947 opinion, cited above, in concluding that the statute affects not only the extra employment of the director but that of his wife, as well.  The present question is whether or not the cases you mentioned, or any of them, would fall within the exception provided in the new  [[Orig. Op. Page 4]] statute, as quoted above.

            For a better understanding we should further examine the statute in the light of its legislative history.  Prior to 1961 it was recognized that there was a confusing number of complex statutes dealing with the same general subject of conflicting interests, in different ways.  An illustration of this point can best be made by comparing the provisions of former RCW 28.58.290 with, for instance, RCW 42.20.010, and the various statutes which were repealed or modified by chapter 268, Laws of 1961, supra.  In reading the provisions of those statutes, one can also note their sweeping provisions and the necessity of a rigid application.  It was further recognized that this rigid application was detrimental in small communities where sometimes the only persons willing to run for public office were disqualified by reason of minor interests only technically forbidden.  These pre‑existing difficulties are reflected in the declaration of the legislative purpose set forth in RCW 42.23.010, as follows:

            "It is the purpose and intent of this chapter to revise and make uniform the laws of this state concerning the transaction of business by municipal officers, as defined in this act, in conflict with the proper performance of their duties in the public interest; and to promote the efficiency of local government by prohibiting certain instances and areas of conflict while at the same time sanctioning, under sufficient controls, certain other instances and areas of conflict wherein theprivate interest of the municipal officer is deemed to be only remote, to the end that, without sacrificing necessary public responsibility and enforceability in areas of significant and clearly conflicting interests, the selection of municipal officers may be made from a wider group of responsible citizens of the communities which they are called upon to serve."  (Emphasis supplied.)

            The provision which we are now considering exempts from the operation of the act, in schools of other than the first class, contracts for unskilled day labor, at wages not exceeding one hundred dollars in a calendar month, and all other contracts, with the further proviso that ". . . the total volume of business represented by such contract or contracts in which a particular officer is interested, singly or in the aggregate, as measured by the dollar amount of the municipality's liability thereunder, shall not exceed two hundred dollars in any calendar month: . . ."

             [[Orig. Op. Page 5]]

            It seems very significant that the statute speaks in terms of "liability" as distinguished from "expenditures" in any month.  There is apparently no problem of construing this statute where a director or his wife is hired in some capacity or another on a strictly monthly basis, or where any and all contracts involving a conflicting interest are to be performed fully in the month in which they are executed.  In all such cases the director may legally receive, directly or indirectly, an aggregate sum of not over two hundred dollars from the municipality in connection with such contracts.  In such cases the total liability of the school district in connection with such contracts, and the district's expenditures in connection with such contracts, are both within the legal limit.

            The problem arises, as here, in the case of a single contract covering a period of several months; e.g., a teacher's contract for twelve months.  Assuming that the contract provides for total compensation for the twelve‑month period in the amount of $2,400.00, the question is whether or not the contract would be void in its entirety, as a liability in the amount of $2,400.00, or would it be valid in so far as it provides for actual expenditures of not over two hundred dollars to be paid in each calendar month.

            From the language of the statute itself one can conclude that a contract calling for a payment of $2,400.00, by a district, whether in monthly installments or in an immediate lump payment, creates a liability in the total amount of the contract.  This office has placed a similar construction upon the word "liability," in many cases in construing municipal debt limit provisions and budget laws.  See, for instance, the opinion of this office to the Superintendent of Public Instruction June 11, 1926 [[1925-26 OAG 187]]; AGO 1955 to the Supervisor of Municipal Corporations, December 13, 1927 [[1927-28 OAG 398]]; AGO 51-53-333 to the prosecuting attorney of Clallam county June 27, 1952; also AGO 57-58 No. 136, to the Superintendent of Public Instruction, November 26, 1957.  Copies of these opinions are enclosed for your reference.  In view of the basic public policy of the statutes prohibiting conflicting interests, as outlined above, we see no alternative but to conclude that the word "liability" was intended by the legislature to include the agreed price covering the extended term of service in its entirety.  The word "liability," by legal definition, is not limited to debts or absolute liabilities, but includes contingent liabilities as well.  See, Black's Law Dictionary, 4th Ed.  Thus, a contract entered into in April, for instance, in the amount of $2,400.00, would have to be considered to be a liability created in the month of April in the amount of $2,400.00, whether or not the amount might be divided, as a convenient method of payment, into future installments of two hundred dollars per month or less.  Otherwise, as we shall demonstrate, the proviso would defeat the very purpose of the act.

             [[Orig. Op. Page 6]]

            Bearing in mind that the statute in question is highly penal in its provisions, we recognize the rule that penal statutes are to be strictly construed.  However, the complete statement of the rule is found in the opinion of our supreme court inState v. Rinkes, 49 Wn. (2d) 664, 667, 306 P. (2d) 205 (1957), as follows:

            "A court may not place a narrow, literal, and technical construction upon a part only of a statute, and ignore other relevant parts.  In the process of construction, the intention of the lawmakers must be extracted from a consideration of all of the provisions of the act.  In re Cress, 13 Wn. (2d) 7, 15, 123 P. (2d) 767 (1942).  Statutes are to be construed according to their evident intent and purpose.  State v. Warburton, 97 Wash. 242, 247, 166 Pac. 615 (1917).  The legislative intent must be gleaned from a consideration of the whole act, by giving effect to the entire statute and to every part thereof.  State v. Houck, 32 Wn. (2d) 681, 684, 203 P. (2d) 693 (1949), and cases cited.

            "Where an act has a doubtful or ambiguous meaning, it is the duty of the court to adopt a construction that is reasonably liberal, in furtherance of the obvious or manifest purpose of the legislature.  Statutesin pari materia must be construed together.  State v. Houck, supra, p. 684, and cases cited.

            "Penal statutes are to be construed strictly, to the end that offenses not entitled to be included shall not be prosecuted.  But they are not to be construed so strictly that they would be defeated by a forced and over-strict construction.  State v. Larson, 119 Wash. 123, 125, 204 Pac. 1041 (1922), and cases cited.

            "Strict construction of a penal statute means merely that the punitive sanctions must be confined to such matters as are clearly and manifestly within the statutory terms and purposes.  It does not mean that a forced, narrow, and overstrict construction should be applied to defeat the obvious intent of the legislature.  SeeNorthern Securities Co. v. United States, 193  [[Orig. Op. Page 7]] U.S. 197, 48 L.Ed. 679, 24 S.Ct. 436 (1904); United States v. Coplon, 88 F.Supp. 912 (1949); State v. Zazzaro, 128 Conn. 160, 20 A. (2d) 737 (1941);People v. Conti, 127 Misc. Rep. 244, 216 N.Y.S. 442 (1926)."

            The general rule as applied in courts generally, is summarized in Volume 3, Sutherland, Statutory Construction, 3rd Ed., §§ 5606 and 5608.

            If any rule of statutory construction is to be considered controlling here, so as to fully effectuate the obvious legislative intent, it should be the rule that provisos, as restraints or limitations upon the general operation of a statute, should be strictly construed.  See,State v. Robinson, 67 Wash. 425, 121 Pac. 848 (1912); also,State v. Christensen, 18 Wn. (2d) 7, 137 P. (2d) 512 (1943).  Such rule of statutory construction is not affected by the question of whether or not the general provisions of the statute are penal in nature.  See Volume 3, Sutherland,supra, § 5608, supra.

            To summarize the legislature's intention, RCW 42.23.030, supra, incorporates first the salutary principle that officers should receive nothing from the treasury except that which is provided by law for their salaries.  See,State v. Miller, supra.  The legislature, in enacting chapter 42.23 RCW, recognized the need of some flexibility in the case of a "remote" interest on the part of a municipal officer, in so far as an exception could be made ". . . without sacrificing necessary public responsibility . . . ."

            Thus, the statute as a whole must be construed as placing a limit upon the total aggregate amount of permissible liability created or outstanding in any given month, as distinguished from a measure of the amount permitted to beexpended by a district in any particular month, in connection with the types of contracts referred to in the statute.  Otherwise, there would be no longer any legal limitation upon the amount of private business a public officer might secure for himself at the expense of his municipality, provided he accomplished it all in a single contract with installments payable at a rate not exceeding two hundred dollars per month, conceivably for life.  Such an interpretation, it is clear, would be completely at odds with the expressed purpose of the legislature in enacting chapter 42.23 RCW, supra.  In our opinion, the exception we are presently considering was designed to take care of emergency situations and to allow stop-gap measures; not to permit regular extra employment of municipal officers.

            In answering your fourth question, we quote § 1, Article VII, subchapter 4, chapter 97, Laws of 1909, page 306 (cf. RCW 28.67.010) as follows:

             [[Orig. Op. Page 8]]

            "No person shall be accounted as a qualified teacher within the meaning of the school law, who is not the holder of a valid teacher's certificate or diploma issued by lawful authority of this state."

            In our opinion the statute refers to persons who exercise a certain function; namely, teachers; without reference to any distinction between part-time, substitute and full-time teachers.  InState ex rel. Shoreline Etc. v. Superior Court, 55 Wn. (2d) 177, 182, 346 P. (2d) 999 (1959), the supreme court said:

            ". . . A school is an institution consisting of a teacher and pupils, irrespective of age, gathered together for instruction in any branch of learning.  Weisse v. Board of Education of City of New York, 178 Misc. 118, 32 N.Y.S. (2d) 258 (1941);Board of Education of City School District of City of Cleveland v. Ferguson, 68 Ohio App. 514, 39 N.E. (2d) 196 (1941).  The three essential elements of a school are (1) the teacher, (2) the pupil or pupils, and (3) the place or institution.  If the alleged school has no teacher, then it does not qualify as a school.  There is one standard which the legislature made applicable to all schools, both public and private, and that standard is that the teacher must be qualified to teach and hold a teaching certificate.  Laws of 1909, chapter 97, subchapter 4, Art. VII, § 1, p. 306, provides:

            "'No person shall be accounted as a qualified teacher within the meaning of the school law, who is not the holder of a valid teacher's certificate or diploma issued by lawful authority of this state.'"  (Emphasis supplied.)

            In our opinion, an individual cannot be employed as a teacher on either a full-time or part-time basis, or as a substitute teacher, unless he is the holder of a valid certificate.  See, in this connection, the following previous opinions of this office on the subject:

            (1) AGO 1223, to the prosecuting attorney of Benton county, June 17, 1920 [[1919-20 OAG 276]].

            (2) Informal opinion to the county superintendent of schools Douglas county, February 17, 1938.

             [[Orig. Op. Page 9]]

            (3) Informal opinion to the superintendent of public instruction September 13, 1940.

            (4) Informal opinion to the prosecuting attorney of Pierce county January 31, 1950.  (Copies are enclosed for your information.)

            In summary, our conclusions are as follows:

            (1) and (2).  Chapter 42.23 RCW, and specifically RCW 42.23.030, prohibits the employment of either a school director or his wife, for compensation, except as specifically provided in that act.

            (3) A proviso of the statute allows such employment in school districts other than districts of the first class, up to a certain maximum amount ($200.00).  However, the maximum amount is measured by the total liability of the district under the contract or contracts at the time they are entered into; not by the size of the monthly installments into which the contract may be divided for subsequent payment.

            (4) No individual may be employed by a school district as a teacher, whether on a full-time, part-time, or "substitute" basis, unless such individual has a teacher's certificate as required by § 1, Article VII, subchapter 4, chapter 97, Laws of 1909, page 306 (cf. RCW 28.67.010, supra.

            We trust that this information will be of assistance to you.

Very truly yours,

JOHN J. O'CONNELL
Attorney General