Milheim v. Moffat Tunnel Improvement District

Mr. Justice Teller

delivered the opinion of the court.

Plaintiffs in error, Milheim and Metcalf, were plaintiffs in a suit to enjoin the defendants in error from proceeding under the recently enacted statute creating The Moffat Tunnel Improvement District, (S. L. 1922) the ground of action being that the said statute is unconstitutional, and that, if enforced, it will burden plaintiffs’ property by an illegal tax.

The other plaintiffs in error are taxpayers who were permitted to intervene as plaintiffs. Answers were filed which presented issues of law as to the alleged violations of the constitution, and of fact as to the benefits to the property subject to assessment. The district court of .Jefferson county heard evidence upon the question of benefits, and found for the defendants. It held also that the act did not violate the constitution, and entered judgment accordingly. The cause is now before us on error.

The act recites that it will be in the interests of the people of the state generally, and of especial benefit to property within the proposed district, to provide, by means of *272a transportation tunnel through the Continental Divide, for communication between the western portion of the state and the eastern portion. It creates an improvement district for the construction of said tunnel, including therein the City of Denver, and the counties of Grand, Moffat and Eoutt, and certain portions of the counties of Eagle, Gilpin, Boulder, Adams and Jefferson. It provides that, within sixty days from the going into effect of the act, written remonstrances against the making of the improvement may be filed with the board created by the act, and that if remonstrances be filed representing in value at least fifty per cent of the real estate in the district, the proposed improvement shall not be made.

It provides for a board of five members, the first board to be appointed by the governor, to hold office until August 31, 1923, the members thereafter to be elected. It is made the duty of the board to construct or contract for the construction, operation and maintenance of said tunnel, its approaches, and all necessary works incidental thereto. The board is authorized to contract with persons or corporations, for the use of the tunnel, upon such rental as the board may fix; said rental in each case to be a fair and just proportion of the amount required to pay interest on the cost of the tunnel, and create a sinking fund to retire the bonds authorized by the act to be issued. The board is prohibited from permitting a monopoly in the use of the tunnel and is required to allow it to be used by all parties applying, up to its capacity, for use.

The act further provides for the use of the tunnel for the transportation of automobiles, transmission of electric power, and the conveyance of water.

It gives the board authority to levy assessments as needed; provides for the appraising of the benefits, for notice to the parties whose property is assessed, and for a hearing on said assessments.

It is claimed that the act is unconstitutional in numerous particulars, and the questions thus raised have been argued by all the parties fully and ably.

*273In the consideration of this cause, we have been mindful of the court’s duty in the premises as stated by the eminent Justice Shaw, in Wellington, et al. Petitioners, etc., 16 Pick. (Mass.) 87, 26 Am. Dec. 681, where he said:

“When called upon to pronounce the invalidity of an act of legislation passed with all the forms and solemnities requisite to give it the force of law, courts will approach the question with great caution, examine it in every possible aspect, and ponder upon it as long as deliberation and patient attention can throw any new light on the subject, and never declare a statute void, unless the nullity and invalidity of the act are placed, in their judgment, beyond reasonable doubt.”

It is contended first, that the improvement is not for a public use.

Counsel for the plaintiffs in error appear to concede, by a quotation to that effect, that a use may be public though not many persons enjoy it. This is well established, the requirement being that the improvement be open to use by all persons who have need of it. Talbot v. Hudson, 16 Gray, (Mass.) 417.

In Tanner v. Treasury T. M. & R. Co., 35 Colo. 593, 83 Pac. 464, 4 L. R. A. (N. S.) 106,, this court said that if the business for which the improvement was made is wholly for private benefit, then the use would be private; “on the other hand, if the business proposed to be carried on * * * is essentially for public benefit and advantage, then the use would be public.”

The court then, after adverting to the fact that there is no strict definition of a public use, said:

“Consequently we find, in examining the authorities, that, in determining whether or not a use is public, the physical conditions of the country, the needs of a community, the character of the benefit which a projected improvement may confer upon a locality, and the necessities for such improvement in the development of the resources of a state, are to be taken into consideration.”

It was then pointed out that the proposed tunnel would *274intersect numerous veins of ore at a great depth, and make possible their working; and that it would drain properties and furnish ventilation to mines, so that the owners of mining properties along and adjacent to the tunnel would secure a distinct benefit therefrom. It was further deemed worthy of notice that the statute recognized that such an improvement might benefit the public generally. The court added that, while the judgment of the Legislature is not conclusive upon the courts, “it is entitled to careful consideration and great weight as the judgment of a co-ordinate branch of the government of the necessities of the state for the development of its resources and the needs of the people in this respect.”

The United States Supreme Court has gone much farther than this. In Spencer v. Merchant, 125 U. S. 345, 8 Sup. Ct. 921, 31 L. Ed. 763, cited with approval in Branson v. Bush, 251 U. S. 182, 40 Sup. Ct. 113, 64 L. Ed. 215, the court said that a legislative determination that lands assessed were benefited by an improvement was not open to review, and added:

“The question of special benefit and the property to, which it extends is of necessity a question of fact, and when the legislature determines it in a case within its general power, its decision must of course be final.”

A later case, Wagner v. Baltimore, 239 U. S. 207, 36 Sup. Ct. 66, 60 L. Ed. 230, qualified the above statement to the extent that the legislative determination would not be final if its action was arbitrary and wholly unwarranted.

The above statement of this court that the circumstances surrounding an improvement are to be considered in determining this question is in line with the holding of the Court of Appeals of New York in Sun Publishing Ass’n. et al. v. Mayor, etc., 152 N. Y. 257, 46 N. E. 499, 37 L. R. A. 788. It was there held that the peculiar situation of the city, and the needs of the public, justified holding that a statute authorizing the construction of a subway by the city, to be leased to a private corporation, was not unconstitutional as providing for the use of public funds for private purposes. *275The case is somewhat similar, in one respect, to the case at bar, in that in both cases attempts were made to secure the construction of the improvement by private capital. The court said:

“The commissioners located the road and tried to induce private capital to construct and operate it. In this they have failed, and the situation is such that the city must itself construct the road or go without it. Here we have a demand for a great public highway, which private enterprise and capital will not construct. It is necessary for the welfare of the people and is required by them. It is public in character and is authorized by the legislature.”

In Walker v. City of Cincinnati, 21 Ohio St. 14, 8 Am. Rep. 24, the court had under consideration a statute under the authority of which the city of Cincinnati proposed to build a railroad from that city to Chattanooga, Tenn. It was there held that the act was not in violation of the constitutional provision which prohibited the general assembly from authorizing cities and towns to loan their credit to a private corporation, that it was for the Legislature to say whether the proposed road was for a public use, and that the act in question was not prohibited by any provision of the state constitution. The court quotes from Cooley on Constitutional Limitations as follows:

“But what is for the public good, and what are public purposes, and what does properly constitute a public burden, are questions which the legislature must decide upon its own judgment, and in respect to which it is vested with a large discretion which cannot be controlled by the courts, except perhaps where its action is clearly evasive, and where, under pretense of a lawful authority, it has assumed to exercise one that is unlawful.”

We cite the case only upon the points mentioned. In the act under consideration the legislature has declared that there is a public necessity for the tunnel. The fact that persons using the improvement must pay for the privilege does not render it any the less a public use, provided all can use it upon substantially the same terms.

*276Under the authority of the holding of this court, as above cited, and in line with the decisions in other jurisdictions, we hold that the objection under consideration is not well taken.

It is next objected that the act delegates to a board not recognized by the constitution, the power to levy taxes, and that, too, without the consent of the taxpayers. As to the last part of the objection, it is sufficient to cite from People ex rel. v. Fleming, 10 Colo. 558, 16 Pac. 298, where this court quotes with approval from an Illinois case as follows:

“The power to enact laws necessarily includes the right in the lawmaking power to determine and prescribe the conditions upon which the law, in a given case, shall come into operation, or be defeated.”

This court then says, that “The legislature may determine absolutely what shall be done, or it may authorize the same thing to be done upon the consent of third parties. It may command, or it may only permit; and in the latter case, as in the former, its acts have the efficacy of law.”

We are not cited to any constitutional provision which supports this claim that the consent of the people must be obtained before a tax can be levied.

It is to be noted here, however, that provision is made for objections by taxpayers, and in case the objections represent fifty per cent of the value of the property to be assessed, the improvement can not be made.

The remainder of this objection is that under section 7 of article X of the Constitution, the right to tax can be delegated only to cities, towns or other municipal corporations, and that this district is not a municipal corporation, and so is not within that classification.

According to Judge Dillon the primary idea of a municipal corporation is an institution to regulate and administer the internal concerns of the inhabitants of a defined locality, in matters peculiar to the place incorporated. Dillon on Municipal Corporations, (2d Ed.) p. 93.

In Wilson v. Board of Trustees, 133 Ill. 443, 27 N. E. 203, a sanitary district, established by the Legislature, to con*277struct a waterway to cárry off the sewage from Chicago and adjacent districts, is held to be a municipal corporation. Counsel for interveners, however, not agreeing on this point with the plaintiffs, class the district among municipal corporations. It is urged, also, that the corporate authorities of such municipalities to whom the right to tax is given, are only such as are elected by the people, or chosen with their’consent.

On these propositions counsel cite Illinois cases which are directly opposed to the rulings of this court, and to a provision of our Constitution.

In People v. Earl, 42 Colo. 238, 94 Pac. 294, we said:

“Municipal corporations are bodies corporate and politic, consisting of the inhabitants of a city, town or district, created by law, partly as the agent of the state to assist in the civil government of the state, but chiefly to administer the local affairs of the city, town or district which is incorporated; they are creatures of statute, endowed with such powers, duties, rights and privileges as are conferred upon them by statute, and none other, except such powers as arise by necessary or reasonable implication, to enable them to execute their functions; the legislature, in the absence of limiting constitutional provisions, has plenary power to adopt, for their government, such measures as shall, in its judgment, best accomplish the purpose for which they are created, including the creation and manner of filling municipal offices, either by election or appointment. (Section 12, Article 14, Constitution.)”

Section 12 of article XIV of the Constitution, thus cited, specifically provides that the general assembly shall provide for the election or appointment of municipal officers. See, also, In re Senate Bill, 12 Colo. 188, 21 Pac. 481. This is a sufficient answer to the claim that the term “corporate authorities” does not include appointees to municipal offices.

It is next insisted that because the assessment is limited to real estate, the law violates the uniformity clause of the constitution (Sec. 3, art. X). This objection would apply equally to all special assessments for local improvements, *278and does not now require discussion in view of the holdings of this court to the] contrary.

Since the decision of Denver City v. Knowles, 17 Colo. 204, 30 Pac. 1041, 17 L. R. A. 135, the law in this jurisdiction has been established contrary to the contention of plaintiffs in error.

It is further urged that the act constitutes a lending of aid to private corporations. On this point Lord v. Denver, 58 Colo. 1, 143 Pac. 284, L. R. A. 1915B, 306, Ann. Cas. 1916C, 893, is cited. That case is clearly not in point, since the statute in that case provided for the payment by the City of Denver of two-thirds of the cost of constructing a tunnel, and gave the railroad company the right thereafter to purchase the city’s interest. The act, therefore, not only,’ in effect, authorized the lending of credit, but authorized an actual partnership between the city and the railroad, requiring the city to assume two-thirds of the risk of the enterprise, with the right in the other party to buy the city’s interest, at cost. The right of the city to lease a tunnel owned by it was not involved or considered.

There is no element of credit to the railroad company in this act. The commission is to construct a tunnel which the district will own and control, and any railroad company using it will pay the rental fixed by the tunnel commission. In the Lord case it was recognized that municipalities may, on their own account, construct tunnels, or other improvement reasonably necessary to public uses, in which the municipality has a special interest. This was the result of the court’s distinguishing the cases of Walker v. City of Cincinnati, supra; Sun Publishing Ass’n v. Mayor, etc., supra; and Haeussler v. City of St. Louis, 205 Mo. 656, 103 S. W. 1034, in each of which the improvement under consideration was owned and controlled by the municipality.

It is further objected that the benefits are unequal. The law does not require that the benefits should be exactly equal.

In City of Denver v. Kennedy, 33 Colo. 80, 80 Pac. 122, 467, it is said, speaking of assessments:

*279“In making such an apportionment, absolute equality is not to be expected. A reasonable approximation thereto is all that can be required. * * * It will be presumed that the city authorities, in making special assessments, did so with reference alone to the special benefits accruing to the property assessed.”

The question of benefits is one of fact, (Hildreth v. City of Longmont, 47 Colo. 79, 105 Pac. 107), and, upon a full hearing, the trial court determined the issue adversely to the plaintiffs in error.

It. is further objected that no special benefits accrue to the property owners in the district in Jefferson county. Bearing in mind the fact that the Legislature has declared that the improvement will be of special benefit to all the property within the district, and applying to that statement the settled doctrine that while such a declaration is not conclusive upon the court, it will be regarded as highly persuasive, and to-be rejected only in case it is palpably false, we cannot say that the objection is well taken. In Denver v. Kennedy, supra, it is said that it is within the province of the Legislature to determine whether or not the special benefits were equal to the cost of the improvement. In this connection it may be noted, also, that it .is .a truism that the growth of cities enhances the value of agricultural lands in their vicinity. It cannot be questioned that the tunnel will make possible the delivery of cbal in Denver at a considerably lower freight rate, and hence make it probable that the growth and prosperity of the city will be materially promoted. That being true, the lands in Jefferson county within this district will assuredly increase in value with the growth of Denver.

It is said also that section 4 of the act, which provides for the election of members of the board to hold office after August 31, 1923, is in violation of section 25 of article V of the Constitution, which prohibits the General Assembly from passing local or special laws for “the opening or conducting of any election, or designating the place of voting.”

This objection is without merit. Whether the inhibition *280in question applies to an act which deals only with the opening or conducting of cm election, and not to one which governs the conducting of elections, need not be determined. This act forms an improvement district and provides for its government. To carry out the purpose as to the government of the district, provision is made for the election of officers. This is merely incidental to the main purpose of the act. The hour of opening the polls, and the period during which they shall be kept open, are specified, as are the qualifications of the electors. All other matters incident to the elections are left to the action of the board of directors.

We are unable to appreciate the force of the objection that neither the rate nor the extent of taxation is limited. No constitutional requirement that the act contain such limitation is named, and we know of none.

It is also contended that the act violates section 8 of article XI, in that it authorizes the creation of a bonded debt without a vote of the qualified electors.

That section, in terms, applies only to cities and towns, and has no possible application to this case.

It is said, also, that the act violates article XX of the Constitution, in that it authorizes a special assessment of property in Denver without the approval of the taxpaying electors. This ignores the fact that the district is an independent entity, not subject to the charter of the City of Denver, though the city forms a part of the district. The same contention was made in Wilson v. Board of Trustees, supra, and the authority of the Legislature to form a district, involving parts of counties and cities, and give it the right of local assessment, was upheld.

Counsel for the interveners urge still other grounds for holding the act unconstitutional.

It is said that it violates section 7 of article X in that it is an imposition by the General Assembly of taxes for municipal purposes. There is no ground for this contention, inasmuch as the assessment is to be made by the officers of the district, and not directly by the Legislature. In an *281objection already discussed counsel recognize that the assessment is to be made by the “corporate authorities.”

It is contended also, that the act violates section 2 of article XV; the 23rd paragraph of section 25 of article V; and section 13 of article XIV, Mills’ Ann. Stats. 1912.

Section 2 of article XV provides that “No charter of incorporation shall be granted, extended, changed or amended by special law, except for such municipal, charitable, educational, penal or reformatory corporations as are or may be under the control of the state.”

This district is manifestly under legislative control, and as such is within the exemptions named. The section applies primarily to private corporations. Carpenter v. People, 8 Colo. 125, 5 Pac. 828.

In Johnson v. People, 6 Colo. App. 163, 40 Pac. 576, it is said that this section clearly grants the power to create municipal corporations by special charters.

The 23rd paragraph of section 25, article V of the Constitution prohibits the Legislature from “granting to any corporation, association, or individual any special or exclusive privilege, immunity or franchise whatever.”

There is nothing in this act which can be considered as granting any special or exclusive privilege, within the meaning of this article of the Constitution. The only authority given to the district is that necessary to carry out the purpose of its creation. If, as is settled by the case above cited, the legislature may create municipal corporations by special charters, the power which it gives to those corporations to carry out their purposes cannot be within this inhibition.

Section 13 of article XIV, which concerns the organization and classification of cities and towns, has no application to the question before us.

Since this district is not a county, and is not given any of the characteristics of a county, the discussion of the several articles of the Constitution concerning counties and their authority is not in point.

Another objection made is that the act violates section *28225 of article V of the Constitution in that it provides by special act for the laying out of a highway, which is prohibited by said section.

Clearly the tunnel is not such a highway as was in contemplation of the makers of the constitution. The term “highway” in that section is to be construed according to its ordinary meaning, and as equivalent to a public road. Manigault v. Springs, 199 U. S. 473, 26 Sup. Ct. 127, 50 L. Ed. 274.

It is further objected that the act violates the provisions of section 35 article V which provides that, “The general assembly shall not delegate to any special commission, private corporation or association, any power * * * to levy taxes.”

This court has held — In re Senate Bill, 12 Colo. 188,— that a board of public works for the City of Denver, to be appointed by the governor, was not a special commission within the meaning of this section. The court points out that the board in question was “permanent in its nature, being charged with continuous duties, and vested with certain perpetual powers.” The term “special commission” was held to refer “to some body or association of individuals separate and distinct from the city government; that is, created for different purposes, or else created for some individual or limited object not connected with the general administration of municipal affairs.”

The tunnel commission is the governing body of the district, and under the view of the court, as above expressed, cannot be regarded in any sense as a special commission.

Another objection made is that the act does not provide for an impartial tribunal “to decide either the legality or the amount of assessment.” It is not apparent how commissioners would, in any event, determine the legality of an assessment, though the amount thereof is under the commission’s control. The objection appears to be that there is no specification as to the qualifications of the commissioners, and that the commissioners may be taxpayers in the district. There is no requirement that their qualifi*283cations be prescribed. That a taxpayer may act in such a case is weil established. Hibben v. Smith, 191 U. S. 310, 24 Sup. Ct. 88, 48 L. Ed. 195. In any event, the objection goes to a provision of the bill which is not claimed to be in itself unconstitutional.

It is objected, also, that the improvement is not local in the sense that justifies special assessments, and that the assessment is arbitrary, unlimited and in excess of benefits. These objections have been answered by the preceding discussion of the matter of benefits.

Finally, we have to consider the familiar objection that the act authorizes the taking of property without due process of law. In fairness to counsel it should be said that this objection is not pressed. The act provides for a detailed notice to the taxpayers of the assessment, and for a notice of time and place for hearing objections thereto, and requires the board to hear evidence and argument on the objections. After that, a taxpayer who is dissatisfied may appeal to the district court and have the question there tried.

Such a statute is not open to the objection that it authorizes the taking of property without due process of law. Spencer v. Merchant, supra.

The Legislature having full authority to create the district, and authorize the improvement, “the only constitutional right possessed by the property owner, as to the making of the proposed improvement, is to a hearing upon the question of what is termed, the apportionment of the tax; i. e., the amount of the tax which he is to pay.” Londoner v. Denver, 52 Colo. 15, 119 Pac. 156.

Counsel have discussed at some length various provisions of the bill, to which they object on grounds which might have been apt if presented to the legislature, but which cannot be considered by this court.

It is elementary that, the power of the legislature being plenary, those who assert the unconstitutionality of an act have the burden of pointing out inhibitions, express or implied, in the Constitution which apply to the law under *284discussion. This burden the plaintiffs in error have not sustained.

The judgment of the district court is therefore affirmed.