Rutherford v. City of Great Falls

• Decision Date: 21 January 1939
• Docket Number: 7909.
• Parties: RUTHERFORD v. CITY OF GREAT FALLS, et al.
• Court: Montana Supreme Court

86 P.2d 656

107 Mont. 512

RUTHERFORD v. CITY OF GREAT FALLS, et al.

No. 7909.

Supreme Court of Montana

January 21, 1939

Original suit by L. F. Rutherford, for himself and on behalf of all other taxpayers of the City of Great Falls, against such city, the Great Falls Housing Authority, and others, to enjoin further proceedings under the Housing Co-operation Law and the Housing Authorities Law. On defendants' demurrer to the complaint.

Demurrer sustained, and proceeding dismissed.

J. W Speer, of Great Falls, for plaintiff.

Paul J Murphy and John L. Slattery, both of Great Falls, for defendants.

STEWART Justice.

This is an original suit by a taxpayer to enjoin the city of Great Falls and the Great Falls Housing Authority from proceeding further under the provisions of Chapters 138 and 140 of the Session Laws of 1935 (secs. 5309.1 to 5309.34, Rev. Codes.) Chapter 138 is known as the Housing Cooperation Law, and Chapter 140 the Housing Authorities Law. The complaint attacks the constitutionality of both Acts, as well as the proceedings already taken thereunder. Defendants have appeared by a joint general demurrer to the complaint.

The chapters in question are similar to those enacted in thirty or more states, Hawaii and Puerto Rico. All are aimed toward the promotion of low rent housing or slum clearance in cities and towns of specified sizes. Broadly stated, the two Acts which for convenience will be discussed together as constituting the Housing Authority, provide:

That any city of the first or second class may set up an authority which shall be a public body, and a body corporate and politic, with power to investigate and study living and housing conditions in the city and to plan and carry out projects for the clearing, replanning and reconstruction of slum areas, and to provide safe and sanitary housing accommodations at reasonable rentals for persons of low income. It is empowered, under certain limitations, to issue and sell bonds which, however, shall not be a debt of the state nor of the city; and it may not in any manner pledge the credit of the state or city, or impose upon either any obligation.

The bonds are to be of two types. One is payable from the income and revenues of a housing project without the credit of the authority being pledged for payment; payment of the other type of bond has the pledge or credit of the authority and may be additionally secured by a pledge of its revenues or by a mortgage of property and revenues of the authority. It is granted the power of eminent domain to be exercised as provided, and its property and securities are apparently exempted from the payment of taxes. The state, county, city or municipality, or any subdivision, is empowered to cooperate with the Housing Authority in essential ways, such as: To grant, sell or lease property; maintain parks, playgrounds, sewage, water and other facilities adjacent to or in connection with housing projects; provide suitable streets, sidewalks, alleys, etc., and to rezone and change the city map in conformity with housing projects.

The complaint sets forth numerous particulars in which the Housing Act allegedly contravenes certain provisions of our Constitution. In the main, each and all of the objections raised must inevitably turn upon the question whether the ultimate result sought to be obtained by the legislation constitutes a public use or purpose. The most important objections are as follows:

A. The Act unlawfully vests the power of eminent domain in the Housing Authority to acquire private property for purposes and uses which are private and not public.

B. It unconstitutionally purports to exempt the property and securities of the Authority from all taxation.

C. It empowers a city unconstitutionally to loan its credit and make donations.

D. It constitutes special or class legislation for the benefit of one class of persons to the exclusion of all others.

E. It fails sufficiently to define the class of persons (those of low income) permitted to occupy the housing accommodations, or to set up sufficient standards to guide the Housing Authority in the selection of tenants, and, therefore, unconstitutionally attempts to delegate legislative authority to the commission of the Housing Authority.

F. That the contract of cooperation entered into between the city and the City Housing Authority is invalid and void.

It is only fair to say at the outset that all of the objections raised against the constitutionality of the Housing Law have been passed upon by the supreme courts of other jurisdictions with respect to similar legislation, and the legislation has been uniformly upheld. We do not assume to say that in each of those jurisdictions the constitutional provisions involved are exactly the same as ours, but a similarity in principle exists sufficient to give to those analogous cases controlling effect here. Likewise, we do not propose to go into detail in passing on the points raised because, at best, our decision would necessarily be but a repetition of what has already been ably said in the following decisions, on which we are content to rest this decision: Dornan v. Philadelphia Housing Authority, 331 Pa. 209, 200 A. 834; Spahn v. Stewart, 268 Ky. 97, 103 S.W.2d 651; Wells v. Housing Authority, 213 N.C. 744, 197 S.E. 693; State ex rel. Porterie v. Housing Authority of New Orleans, 190 La. 710, 182 So. 725; New York City Housing Authority v. Muller, 270 N.Y. 333, 1 N.E.2d 153, 105 A.L.R. 905; Marvin v. Housing Authority of Jacksonville, Fla., 183 So. 145; Williamson v. Housing Authority of Augusta, Ga., 199 S.E. 43; McNulty v. Owens, 188 S.C. 377, 199 S.E. 425; In re Opinion of the Justices, 235 Ala. 485, 179 So. 535.

In enacting the law the legislature made certain findings of fact upon the basis of which it determined and declared the necessity in the public interest of the provisions enacted, and that the objects thereof were "public uses and purposes for which public money may be spent and private property acquired." Sec. 1, Chap. 138; sec. 2, Chap. 140. It is obvious that the law was passed in the exercise of the sovereign police powers inherent in state governments. State v. Safeway Stores, Inc., 106 Mont. 182, 76 P.2d 81. It is equally clear from a reading of the findings and declarations of necessity set out in both Acts that the legislature considered that it was enacting laws involving a public purpose. Legislation having for its purpose the eradication of slums and the substitution in place thereof of safe and sanitary dwellings is well within the definition of "public purpose" as defined in Green v. Frazier, 44 N.D. 395, 176 N.W. 11, affirmed by the United States Supreme Court in 253 U.S. 233, 40 S.Ct. 499, 64 L.Ed. 878, as follows [page 17]: "A public purpose *** has for its objective the promotion of the general welfare of all the inhabitants or residents within a given political division, as, for example, a state, the sovereignty and sovereign powers of which are exercised to promote the public health, safety, morals, general welfare, security, prosperity, contentment, and equality before the law of all the citizens of the state."

The public nature of slum clearance projects having been recognized and passed upon by the legislature, as was their right, it is not now our duty or prerogative to interfere with that legislative finding in the absence of a clear showing that the determination of that body was wrong. Their findings, while not conclusive, are entitled to much weight. McNulty v. Owens, supra; Spahn v. Stewart, supra; New York City Housing Authority v. Muller, supra. All of the cases heretofore cited have upheld similar housing authority laws as being for a public purpose, and demonstrate very conclusively the reasons for such conclusions. We are in accord with that view.

Having decided that the use to which the housing projects will be devoted is a public one, it follows that the grant in the Housing Authorities Law of the right of eminent domain does not violate either Article 3, section 14, or Article 15, section 9, of the state Constitution, assuming just compensation be made to owners. Dornan v. Philadelphia Housing Authority, supra; McNulty v. Owens, supra; Williamson v. Housing Authority of Augusta, supra; Marvin v. Housing Authority of Jacksonville, supra; Spahn v. Stewart, supra; New York City Housing Authority v. Muller, supra; State ex rel. Porterie v. Housing Authority of New Orleans, supra.

By virtue of these same authorities where the question was raised, the conclusion followed that the public nature of the use to which the housing property was devoted justified its exemption from state and local taxation. The same is true here. Peculiarly enough, the property and securities of an authority are not expressly exempted from taxation in the Act itself, although such intention is announced in the title thereof. Whether this was inadvertently left out, or intentionally so, does not appear nor does it matter. Express exemption of housing properties and securities appears in the statutes of many of the states, and a few, as ours, make no express provision. However, we believe the matter is of no consequence. Article 12, section 2, of the Constitution, expressly exempts from taxation the property of the United States, the state, county, cities, towns, school districts, municipal corporations and public libraries, because such property is public property. The property and securities of a Housing Authority are essentially public property and, therefore, within the constitutional exemption.

On this point it is said in Dornan v. Philadelphia Housing Authority, supra, 200 A. 843: "In the absence of any statute to the contrary public property used for public purposes is exempt...