City of Tombstone v. Macia

• Decision Date: 24 April 1926
• Docket Number: Civil 2420
• Citation: 30 Ariz. 218,245 P. 677
• Parties: THE CITY OF TOMBSTONE, OF THE STATE OF ARIZONA, a Municipal Corporation, and O. GIBSON, Mayor, Dr. H. HOUSTON HUGHART, C. W. SCHNEIDER, P. H. KNOLES, R. V. SAUNDERS, Councilmen, and R. V. SAUNDERS, City Clerk of Said City, Appellants, v. J. H. MACIA, Appellee
• Court: Arizona Supreme Court

245 P. 677

30 Ariz. 218

THE CITY OF TOMBSTONE, OF THE STATE OF ARIZONA, a Municipal Corporation, and O. GIBSON, Mayor, Dr. H. HOUSTON HUGHART, C. W. SCHNEIDER, P. H. KNOLES, R. V. SAUNDERS, Councilmen, and R. V. SAUNDERS, City Clerk of Said City, Appellants, v. J. H. MACIA, Appellee

Civil No. 2420

Supreme Court of Arizona

April 24, 1926

APPEAL from a judgment of the Superior Court of the County of Cochise. Gerald Jones, Judge.

Reversed and remanded.

Mr. O Gibson, for Appellants.

Mr. J T. Kingsbury, for Appellee.

Ingraham Superior Judge. McAlister, C. J., and Ross, J., concur. Note. -- Judge LOCKWOOD having been disqualified, Honorable FRED L. INGRAHAM, Judge of the Superior Court of Yuma County, was called to sit in his stead.

OPINION

Ingraham, Superior Judge.

This is an injunction suit in which a citizen and taxpayer of the City of Tombstone seeks to enjoin that city and certain officers thereof from executing and delivering to certain bidders the coupon bonds of that municipality. The proposed bonds were to be issued for the purpose of raising funds with which to erect a combined electric light, power and ice plant for said municipality, for the purpose of "supplying said city and the inhabitants thereof with adequate light, power and ice."

In the trial court the case turned upon the proper construction of chapter 31, Laws of 1921, which authorizes a municipal corporation to engage in any business for which it may issue a franchise to another, and also authorizes such a corporation to issue bonds for the acquisition and maintenance of any such business. The learned trial court held that a municipality had not the right to issue a franchise to another to construct and operate an ice plant, defining franchise as "a right which cannot be exercised without the express permission of the sovereign power." Thompson on Municipal Corporations, 2d ed., § 2860. Not being authorized by law to issue a franchise for the construction and operation of an ice plant, the municipality, therefore, was not authorized, in the opinion of the trial judge, to issue its bonds for the acquisition of such business. The injunction was issued.

Appellant now urges in support of his appeal that chapter 31, Laws of 1921, upon the terms of which the decision of the trial court was based, must be construed in effect to have been amended by the prior adoption of section 34, article 2, Constitution of Arizona, which amendment authorizes the municipal corporations of the state to engage in industrial pursuits.

Counsel for appellant urges that said chapter 31, when considered in connection with the said amendment to the Constitution, should be held to read as follows:

"Every municipal corporation within this state shall have the right to engage in any industrial pursuit; and every such municipal corporation shall have the right and power to purchase, acquire, own and maintain, within or without the corporate limits of such municipal corporation, any such industrial pursuits; . . . and for any and all such purposes in order to carry out the same, such municipal corporation shall have the power to issue and sell bonds."

What is the proper construction to be given said chapter 31 is therefore an important question in the case. However, for convenience, we shall leave now the discussion of this question, returning to it later on in the course of this opinion.

On behalf of appellee, it is urged in this court that the power of municipal corporations to levy taxes is limited by section 1 of article 9, Constitution of Arizona, to public purposes; that an industrial pursuit, such as an ice plant from which to supply the inhabitants of the city with ice, is not a public purpose; that the issue of bonds for such a purpose would later entail the levy of taxes for the payment of the principal and interest on such bonds, which taxes would in turn not be for a public purpose. Therefore appellee contends the judgment of the trial court enjoining the issue of such bonds should be affirmed.

What is, and what is not, a public purpose? It is fundamental that taxes may not be levied for private purposes. It has been well said:

"To lay with one hand the power of the government on the property of the citizen, and with the other to bestow it upon favored individuals to aid private enterprises and build up private fortunes, is none the less a robbery because it is done under the forms of law and is called taxation." Loan Assn. v. Topeka, 20 Wall. 655, 22 L.Ed. 455.

"Public purpose" is a phrase perhaps incapable of definition, and better elucidated by examples. The maintenance of an adequate police department for the keeping of order and the enforcement of the law; the construction of public buildings for the housing of government officers while performing their public duties, without which the business of government would be very inconveniently done; the provision for a system of public education so that the coming generation may be adequately prepared for the performance of the functions of government; opening, maintaining and paving a system of public streets, there being no corporation other than the government at all adequate for the performance of this duty; providing a system for the disposal of sewage, thus protecting the public health -- all these are recognized clearly as governmental or public purposes. Other acts will be clearly recognized as not belonging to this category. Bonds issued in payment of land purchased to aid in a private enterprise in holding annual fairs are not for public purposes (Eufaula v. McNab, 67 Ala. 588, 42 Am. Rep. 118); nor those issued as a donation in assisting a company to embark in the manufacture of linen fabrics (Bissell v. Kankakee, 64 Ill. 249, 21 Am. Rep. 554); nor those issued to relieve individuals whose homes had been destroyed by an extensive fire (Coates v. Campbell, 37 Minn. 498, 35 N.W. 366).

Other acts are of such a mixed or doubtful nature as to fall not clearly in one or the other of these categories. It is clearly within the limits of a governmental or public purpose to protect the public health, and one of the agencies most conducive to a high standard of public health is a pure and abundant water supply. It is true that all municipalities make a charge to the householder for the use of water from the public system, or in certain cases for furnishing water to manufacturing concerns, perhaps in immense quantities, for generating steam, or other industrial uses, and to that extent they may be said to be in the business of selling water for a profit. But this element has not in recent years hindered any court from holding that a city in establishing or maintaining a public water system might raise money for that purpose by taxation, and that this was a public purpose. Opinion of the Justices, 150 Mass. 592, 8 L. R. A. 487, 24 N.E. 1084. So the proper lighting of public highways and streets is held to be a valid exercise of the police power, having for its purpose the protection of the lives and property of the people of the community, a governmental purpose. Properly lighted streets and public places give a certain degree of immunity from attack by thieves, robbers or burglars at night, and also make them safer for their proper use. But in late years such lighting systems when established have been, with the sanction of the courts, used for the purpose not only of lighting the streets and public buildings, but also in supplying for a profit gas or current to the inhabitants of the city for the lighting of their private residences and places of business, and for power to operate elevators and machinery. Jacksonville Electric Light Co. v. Jacksonville, 36 Fla. 229, 51 Am. St. Rep. 24, 30 L. R. A. 540, 18 So. 677. A toll-charging canal might gather to itself wide-spreading waters, and thus, in addition to furnishing transportation, promote the public health. The latter purpose would be held a public purpose. Toll-charging is a matter of profit; but the Erie Canal, constructed by the state of New York, is too venerable an example for the courts to pronounce such a canal not a public purpose, although it has been doubted that it is a governmental function to supply the commodity of transportation. Abbott's Public Securities, § 107, p. 224. These examples will suffice to show how mixed a question it often is to determine whether a given enterprise falls strictly within the governmental or public powers, or lies in the opposite field of proprietary effort.

It should be noted that the existence of an element of business for profit is not sufficient to determine whether the proposed activity is for a public purpose or not.

"The true test is that which requires that the work should be essentially public, and for the general good of all the inhabitants of the city. It must not be undertaken merely for gain or for private objects. Gain or loss may incidentally follow, but the purpose must be primarily to satisfy the need, or contribute to the convenience, of the people of the city at large. Within that sphere of action, novelty should impose no veto. Should some inventive genius by and by create a system for supplying us with pure air, will the representatives of the people be powerless to utilize it in the great cities of the state, however extreme the want and dangerous the delay? Will it then be said that pure air is not as important as pure water and clear light? We apprehend not." Sun Printing Assn. v. New York, 40 N.Y.S. 607, 8 A.D. 230, affirmed in 152 N.Y. 257, 37 L. R. A. 788, 46 N.E. 499.

In view of these general considerations is the manufacture and sale of ice by a city to its inhabitants a public purpose? In approaching this question, we must bear in mind the fact that many parts of the ...