Marchi v. Brackman

MR. JUSTICE BOTTOMLY:

I concur in part and dissent to most that is said in the majority opinion and especially with the disposition of this case.

The plaintiffs as resident freeholders within the proposed district brought this action to enjoin the defendants, the mayor, the city commissioners of the City of Helena, and the Montana Power Company, a corporation, from proceeding with the installation of lighting fixtures and appliances in the city’s designated special lighting district No. 190, and the removal of the present existing lighting system therein, under Resolution of Intention No. 5229, which was finally passed March 22, 1954, and the city’s resolution No. 5259, purporting to create the special improvement lighting district No. 190, which was finally passed June 28, 1954. The trial court issued and caused to be served a temporary injunction against defendants.

Defendants filed motions to strike most of the complaint and the defendant Montana Power Company also moved to quash and vacate the injunction. After hearing had all motions were sustained. This appeal is from the order dissolving the injunction.

The City of Helena, through its council, proceeding under R.C.M. 1947, section 11-2245 et seq., which statutes provide a special procedure for the special purpose of authorizing city and town councils and commissions to create special improvement lighting districts and the installation of the necessary facilities, by its Resolution of Intention No. 5229, declared its intention to create and establish a special lighting district No. 190, in the City of Helena, for the purpose of making special improvements upon and along portions of certain named streets and alleys therein and erecting and installing special lighting improvements, 84 4000-lumen incandescent fixtures on steel poles and 13 2500-lumen incandescent fixtures mounted on wood poles, all mounted at a height of 25 feet and served by a single overhead wire.

*239The preliminary resolution further specifies the boundaries of the proposed special lighting district and also states: “That it is agreed that in accordance with State law, the City of Helena agreed to assume 25% of the cost of said lighting, the balance of 75% will be assessed to the property owners within the district, payable annually on a pro-rated basis equally according to the square footage owned by each property owner * * * That the Montana Power Company shall install the above lighting without initial installment cost and the yearly cost of maintenance will be $3,179.04 for the entire district.” Emphasis supplied.

The proposals, terms, conditions and method, contained in said preliminary Resolution of Intention No. 5229, were carried over into Resolution of Intention No. 5259 which the City of Helena, through its city commission, first passed June 14, 1954, and finally passed June 28, 1954. Said Resolution No. 5259 purported to create special lighting district No. 190 in accordance with the Resolution of Intention, but going further and authorizing and directing the mayor and city clerk of the council or commission to enter into a contract with the Montana Power Company, a corporation, for the furnishing of the materials and installation of the improvements to be made in the special improvement lighting district No. 190.

The injunction was to enjoin and prevent the defendants from taking further action or proceeding under or pursuant to the aforesaid resolutions.

Here the city commission of Helena has proceeded under R.C.M. 1947, section 11-2245 et seq., and by said resolutions has attempted to create a special improvement lighting district No. 190, also pi'oviding in said resolution i;or the installation therein of all necessary parts, wires, conduits, lamps and other necessary equipment, along with the maintenance thereof and the furnishing of the energy necessary therefore, and thereby the removal of the existing lighting system now owned by the taxpayers and city.

It is the contention of plaintiffs that Resolution of Intention *240No. 5229 and Resolution No. 5259 are void for the reason that the city commission had no lawful authority or power by said resolutions to turn over to any individual or corporation the installation of the lighting fixtures without submitting the same for advertisement and public bid for a contract for the furnishing and installing of said fixtures, with a limitation thereon of not more than three years as made mandatory by R.C.M. 1947, section 11-1202. It is further contended that the city commission did not ascertain the cost separately for the installation of such lighting system nor did it create a “special fund” into which the money collected therefor shall be paid, as made mandatory by R.C.M. 1947, section 11-2251; that the city commission made no provision for a separate determination of the costs of maintenance, nor a special contract therefor with a specific limitation of said contract to a three-year period, nor a special “maintenance fund” for said district into which the tax therefor be paid as required by R.C.M. 1947, section 11-2252; that the city commission did not provide in said resolutions for the payment of all costs and expenses of the improvements and construction in the special improvement lighting district by special improvement district bonds or warrants as the mandate of R.C.M. 1947, section 11-2249 requires.

It should be noted that these proceedings have for their ultimate purpose the subjection of the property within the special improvement district to taxation and assessment to bear 75 % of the cost of the improvements and all of the property in the City of Helena to bear 25 % of the cost of the improvements in said district No. 190.

These statutes, R.C.M. 1947, sections 11-1202 and 11-2245 to 11-2255, being special statutes for a special purpose, set forth in mandatory and particular terms the procedure that must be followed by a city council or commission in order for the council or commission to lawfully proceed and lawfully perfect such a district. These statutes are in in vitum, and in recognition of these facts the legislature has provided a complete and direct plan of procedure designed to protect prop*241erty from confiscation and at the same time permit beneficial improvements to be made. The legislature clothed the city council or commission only with limited powers and no presumption in favor of its jurisdiction will be indulged. The statutes measure its authority and compliance with the terms of the statute is a condition precedent to its right to act. The authorities here, as elsewhere, are quite uniform in holding that statutes of this character are mandatory, and no argument however specious can excuse a failure to observe their mandate. Compare Johnston v. City of Hardin, 55 Mont. 574, 579, 581, 179 Pac. 824; Hinzeman v. City of Deer Lodge, 58 Mont. 369, 193 Pac. 395.

The following constitutional provisions are both mandatory and prohibitory:

Section 1 of Article XIII provides, as far as pertinent here, that “Neither the state, nor any county, city, town, municipality, nor other subdivision of the state shall ever give or loan its credit in aid of, or make any donation or grant, by subsidy or otherwise, to any individual, association or corporation

Public tax funds may not be used in aid of a private business. It is not the use to which tax money may be put, but the restriction is the nature or capacity of the recipient. See Cramer v. Montana State Board of Food Distributors, 113 Mont. 450, 129 Pac. (2d) 96. The purpose and design of the restrictions placed in section 1 of Article XIII were to prevent the use of public funds raised by tax levies from being-used in aid of enterprises apparently designed and devoted to quasi-public purposes, but actually engaged in private business. Compare Thaanum v. Bynum Irr. Dist., 72 Mont. 221, 232 Pac. 528.

Section 36 of Article V provides, as far as pertinent here, that “The legislative assembly shall not delegate to any * * * private corporation or association, any power to make, supervise or interfere with any municipal improvement * * * or *242to levy taxes, or to perform any municipal functions whatever. ’ ’ Emphasis supplied.

The general rule is stated in 63 C.J.S., Municipal Corporations, section 1297, page 1040: ‘ ‘ The extent of the power to levy special assessments for local improvements and the manner of its exercise are to be determined solely by the legislation conferring the power, and ordinarily such legislation is to be construed strictly as against the municipal corporation and liberally in favor of the property owner.” Emphasis supplied. In the same authority, section 1052, page 673, it is said that “a municipality’s statutory authority to build and operate a light system is a right which cannot be contracted away * *

In 37 Am. Jur., Municipal Corporations, section 118, page 732, the rule is stated thus: “The same restrictions which rest upon the state legislature as to the delegation of legislative powers and functions conferred upon it by the Constitution are held to rest upon a municipal corporation as to powers granted it by the legislature. It follows that a municipal corporation cannot delegate to private individuals or corporations any of the governmental legislative or discretionary functions confided to it by the legislature.”

Cities and towns are simply political subdivisions of the state for governmental purposes, and have only such power as granted by the legislature. See State ex rel. Rocky Mountain Bell Telephone Co. v. Mayor, etc., of City of Red Lodge, 30 Mont. 338, 76 Pac. 758; State ex rel. Quintin v. Edwards, 40 Mont. 287, 303, 106 Pac. 695, 20 Ann. Cas. 239; State ex rel. City of Butte v. Police Court, 65 Mont. 94, 100, 210 Pac. 1059; Stephens v. City of Great Falls, 119 Mont. 368, 371, 175 Pac. (2d) 408.

In state ex rel. City of Billings v. Billings Gas Co., 55 Mont. 102, 173 Pac. 799, 800, this court said:

“A city of this state has only such authority as is conferred upon it by express legislative declaration or by necessary implication (Helena Light & R. Co. v. City of Helena, 47 Mont. 18, 130 Pac. 446), and any doubt as to the existence of a partieu*243lar power will be resolved against the city, and the right to exercise the power denied. State ex rel. Quintin v. Edwards, 40 Mont. 287, 106 Pac. 695, 20 Ann. Cas. 239.

‘ ‘ Since a city exercises only limited, delegated authority, anyone claiming the benefit of the city’s act has the burden of showing that it acted within the scope of its authority.” Compare Morse v. Kroger, 87 Mont. 54, 285 Pac. 185; Broadwater v. Kendig, 80 Mont. 515, 261 Pac. 264.

In Carlson v. City of Helena, 39 Mont. 82, 109, 102 Pac. 39, 47, Chief Justice Brantly speaking for the court said, “Whenever a power is conferred upon a municipality, and the mode of its exercise is pointed out, this mode must he pursued.” Emphasis supplied. State ex rel. Daly v. Dryburgh, 62 Mont. 36, 203 Pac. 508; State v. Stark, 100 Mont. 365, 52 Pac. (2d) 890. “The reason for the rule is that it must be presumed that the state has granted in clear and unmistakable terms all that it intended to grant at all.” State ex rel. Quintin v. Edwards, supra, 40 Mont. at page 303, 106 Pac. at page 699; Shapard v. City of Missoula, 49 Mont. 269, 279, 141 Pac. 544.

In Ford v. City of Great Falls, 46 Mont. 292, 309, 127 Pac. 1004, 1009, Chief Justice Brantly speaking for the court said: “If the statute granting the power also prescribes the procedure which must be pursued, this procedure is the exclusive guide.” In the same case, 46 Mont. at page 313, 127 Pac. at page 1011, it was said: “Our statute [section 3278, Codes of 1907, now R.C.M. 1947, section 11-1202] requires that all work necessitating the expenditure of a sum exceeding $250 [now $1,000] shall be let by contract to the lowest responsible bidder. This requirement extends to and includes expenditures made from the general revenues of the municipality as well as from funds derived from special assessments.” Emphasis supplied. Here the mode of the exercise of the power is minutely pointed out by the legislature.

Here there was no compliance nor attempted compliance with R.C.M. 1947, section 11-1202, by the city commission. The resolution speaks for itself. There was no advertisement for *244bids; there were no bidders; there was no letting of a contract to construct, erect and install the appliances for the lighting district to the lowest responsible bidder as required nor any limitation of the contract period. In fact, this section 11-1202 was completely ignored by the city commission.

The legislature has granted to city and town councils and commissions the power and authority to create special improvement lighting districts, and the methods of financing the costs' of the required fixtures, poles, wiring, lights and other necessary equipment, and the installation of the same. This power and authority is granted under a series of statutes which prescribes the power so delegated and directs minutely and with great particularity each step in the proceedings and mode that a city or town council or commission must take and follow in order to acquire and retain jurisdiction to proceed to a completed legal special improvement lighting district. Compare Stadler v. City of Helena, 46 Mont. 128, 127 Pac. 454; State ex rel. Quintin v. Edwards, supra. See 1 Dillon, Municipal Corporations, 5th Ed., section 237, page 448 et seq.

The statutes limiting, governing and controlling city and town councils and city commissions in the creating, financing and operating special improvement lighting districts are R.C.M. 1947, sections 11-2245 to and including 11-2257. These are special statutes enacted by our legislature for the special purpose of authorizing cities and towns to create and install the fixtures in special improvement lighting districts and establish the public policy of the state in this matter. Prom the reading of these statutes and the history of the legislation, it is apparent that the city or town council or commission in exercising such governmental power so delegated is acting as an agency and subdivision for and of the state; that it is required by statute, where the city does not do the work itself, that any installation of the poles, parts, wires, pipes, conduits, lamps or lighting equipment shall be by contract, under competitive bid to the lowest responsible bidder, R.C.M. 1947, section 11-1202, as amended by Chapter 139, Laws of 1949; Ford *245v. City of Great Falls, supra; that the costs thereof shall be assessed as provided by section 11-2251, and that all money derived from the collection of the assessments and tax shall constitute a fund to be known as “Special Improvement District No. 190 Fund”; that the improvements shall be owned, controlled and at all times under the direct supervision of the city or town.

This is made plain by R.C.M. 1947, section 11-2249, which provides, “All costs and expenses incurred in the construction of the improvement specified in this act shall he paid for hy special improvement lighting district bonds or warrants, in such form as may be prescribed by ordinance drawn against a fund to be known as ‘Special Improvement Lighting District No..... Fund.’ Said warrants or bonds shall be in the denomination of one hundred dollars or fractions or multiples thereof; and may be issued in installments. Such warrants or bonds shall be redeemed by the treasurer when there is money in the fund against which said warrants or bonds are issued available therefor, and may extend over a period not to exceed eight years, and shall bear interest at a rate not exceeding six per cent (6%) per annum from the date of registration thereof, until called for redemption or paid in full, interest to be payable annually pn the first day of January of each year as expressed by the interest coupon attached thereto, which may bear the engraved facsimile signature of the mayor and city clerk. The requirements of this section shall apply to all special improvement lighting districts, including those now in the process of formation or to he formed hereafter.” Emphasis supplied.

The property owner affected may always complain where as here the city commission fails or refuses to perform its duties and assume the responsibilities as required by the law involved. Every child knows there is a cost incurred to install such fixtures.

It is pertinent and should be noted that the italicized last sentence of the foregoing section 11-2249 was amended into that section by Chapter 55, Laws of 1947. These controlling *246statutes were not even attempted to be complied with, but were completely overlooked or ignored by the commission in its proceeding's in this matter.

There is a very good reason for each of the legislative provisions; the people who are going to pay for the improvement want to know what the entire cost of the installation of the improvement will be, and the amount that will be assessed against each lot or parcel, and the length of time such assessment will be imposed upon their property until the cost of such installation will be fully paid, and the installation owned by the municipality, which means that it will be owned by the people themselves.

Owners of land within or without the boundaries need this information so as to advise prospective purchasers. Furthermore, all of the taxpayers of the city want to know for what period of time they will be assessed for their proportionate share of the 25 % of the cost of such a special improvement lighting district.

The law requires that after the contract has been let for the installation of the lighting system for such a district, the city or town council shall ascertain the costs of such installation, and adopt a resolution assessing the property in the district as provided by R.C.M. 1947, sections 11-2251 and 11-2246. After such lighting system improvements have been installed, as pointed out above, the city or town council may then by contract provide for the furnishing of electric current and the maintenance of the lights thereof as provided by R.O.M. 1947, section 11-2252.

Section 36 of Article V of our Constitution, supra, prohibits the legislature and thereby prohibits its agencies and subdivisions, the town or city council or commission in this instance, from delegating any power to any special commission, association or corporation to construct and own any such municipal improvement. The city cannot transfer to an individual or quasi-public corporation, or to any other entity, for its own use and profit, the power and authority which the statutes *247allow to be used only by the city for the public benefit. Compare Bennett v. Winston-Salem Southbound R. Co., 170 N.C. 389, 87 S.E. 133, L.R.A. 1916 D, 1074.

Where, as here, the legislature has conferred upon a city or town council or commission the power and authority to create a special improvement lighting district and the authority to install the needed fixtures therein and the management thereof, such delegated power and authority is a public trust that only the council or commission may exercise, and then only as prescribed by law. This public duty of exercising such governmental power may not be evaded, conferred, assigned or delegated to any other entity. Compare State ex rel. Nelson v. Timmons, 57 Mont. 602, 189 Pac. 871; Shapard v. City of Missoula, supra; Bidlingmeyer v. City of Deer Lodge, 128 Mont. 292, 274 Pac. (2d) 821, 823.

The very purpose of the legislature in minutely prescribing in detail each step to be taken by a city or town council or commission in creating special improvement lighting districts and the installation of the improvements was to protect the taxpayer, avoid uncertainty and costly litigation.

Under the resolution and plan here the city council or commission would simply be turning over its governmental duties and public tax money to a corporation which would be assuming and exercising the governmental power and functions which the legislature strictly delegated to the city council and commission. Compare State ex rel. Browning v. Brandjord, 106 Mont. 395, 81 Pac. (2d) 677; Dickey v. Board of Com’rs, 121 Mont. 223, 191 Pac. (2d) 315.

The city commission, under its resolutions, would be levying a tax on all the property in the City of Helena to make up the 25 % of the cost of the installation in special improvement lighting district No. 190. The recipient thereof would be a private corporation, exercising governmental power in its construction, ownership and management of a lighting system on the streets and alleys of the City of Helena within the said district No. 190, all of which would be in direct violation of *248the above-quoted mandate of the Constitution and the applicable statutes. It follows that such city funds and tax money may not be so used. Compare Sjostrum v. State Highway Commission, 124 Mont. 562, 569, 228 Pac. (2d) 238; Thaanum v. Bynum Irr. Dist., supra; Cramer v. Montana State Board of Food Distributors, supra. Courts will look to the facts and determine whether the particular ordinance or resolution or act of the council or commission carries out the spirit and intent of the applicable legislation and the mandatory procedure required, or whether the resolution tends directly or indirectly to nullify the legislative requirements. Compare State ex rel. Quintin v. Edwards, supra.

The court stated in the Quintín ease, “The effect of the proceedings, as a whole, has been to annul the statute and defeat the purpose for which it was enacted, by the very body to which has been intrusted the power to administer it.” So here in this case, it is the city commission to whom the legislature has granted and entrusted the power and authority, under strict and explicit statutory requirements, to create special improvement lighting districts and to assess the costs thereof, and the installation of the necessary lighting system. The effect of the above-adopted resolutions No. 5229 and No. 5259 has been to annul the constitutional and applicable statutory provisions and defeat the purposes for which they were enacted.

Under such a resolution the city council or commission has illegally delegated its governmental functions to a private corporation in contravention of the above section of the Constitution, as well as in direct violation of the legislative stautory mandate. In adopting the said resolution and assuming to put into operation the proposed terms thereof, the city council or commission of Helena has acted in direct violation of the mandate of the Constitution and the specific requirements prescribed by the statutes and by so acting has in effect granted to the Montana Power Company a franchise to place their poles and wires upon the streets without submitting the appli*249cation as required by R.C.M. 1947, sections 11-1206 and 11-1207. The said resolutions Nos. 5229 and 5259, not being in anywise in conformity with the express law applicable thereto but in direct violation thereof, are void and of no force or effect, and did not confer upon the mayor and city clerk of Helena the authority they assumed to exercise.

For all purposes of jurisdiction, municipalities are like inferior courts and must be able to point to the statute giving them the power and authority for their acts in every case. If this be wanting, their proceedings must be held void whenever they come in question, even collaterally. See State ex rel. Quintin v. Edwards, supra.

Neither the municipality, nor its officers, can do any act, or make any contract, or incur any liability, not authorized by legislative act applicable thereto. All acts beyond the powers so granted are void. These principles are of transcendent importance, and lie at the foundation of the law of municipalities. See 1 Dillon, Municipal Corporations, 5th Ed., section 237, page 450; Stephens v. City of Great Falls, 119 Mont. 368, 371, 175 Pac. (2d) 408; Brackman’s, Inc., v. City of Huntington, 126 W. Va. 21, 27 S.E. (2d) 71, 73; City of Huntington v. State Water Commission, 137 W. Va. 786, 73 S.E. (2d) 833; 2 McQuillin, Municipal Corporations, 3d Ed., sections 4.04 and 4.05, pages 12, 13, 14, and cases cited thereunder.

I agree with the majority opinion that the order of the district court dated November 17, 1954, granting the separate motions of the defendants to strike and granting the motion of defendants to quash the injunction theretofore issued in the said cause and dissolving the injunction, should be reversed and set aside and the cause remanded. However, I would give further directions to the court to enter judgment enjoining the defendants, the city commission of the City of Helena, Montana, and the mayor and clerk of such city from proceeding further under the above void resolutions.