Gilbert v. Traverse City

• Decision Date: 04 June 1934
• Docket Number: No. 140.,140.
• Citation: 267 Mich. 257,255 N.W. 585
• Parties: GILBERT et al. v. TRAVERSE CITY et al.
• Court: Michigan Supreme Court

267 Mich. 257

255 N.W. 585

GILBERT et al.

v.TRAVERSE CITY et al.

No. 140.

Supreme Court of Michigan.

June 4, 1934.

Appeal from Circuit Court, Grand Traverse County, in Chancery; Parm C. Gilbert, Judge.

Suit by George Gilbert and another against Traverse City and others. From an adverse decree, defendants appeal.

Reversed and rendered.

Argued before the Entire Bench, except NORTH, J.

John W. Patchin, City Atty., of Traverse City, for appellants.

Matthews & Williams, of Traverse City, for appellees.

BUSHNELL, Justice.

At this term of court we decided the cases of Young v. City of Ann Arbor, 255 N. W. 579, and Block v. City of Charlevoix, 255 N. W. 579. Those decisions uphold the constitutionality of Act No. 94 of the Public Acts of 1933. It is therefore only necessary to discuss a few of the points raised in the instant appeal. Those which are covered by the opinion of Mr. Justice Potter in the Young Case will be indicated without further consideration.

Plaintiffs, residents and taxpayers of the city of Traverse City, a municipal corporation, question the constitutionality of the act and the validity of an ordinance of the city entitled: ‘An Ordinance to provide for acquiring and constructing by the City of Traverse City, Michigan, a project to be known as the Traverse City Municipal Harbor and Park Development and to provide for the owning and operating of such project and for enlarging, extending and repairing of same and providing for the issuing of self-liquidating revenue bonds, the principal and interest of which are to be payable solely from the revenues derived from the operation of such project, and to regulate the use of the revenue of such project when any such bonds are issued and outstanting.’

The issues framed by a sworn bill and answer were presented to the circuit court on an agreed statement of facts. The court promptly filed an opinion in which it held that the ordinance was legally passed but that the act and some of the provisions of the ordinance were invalid in part. It found that the city was without lawful authority to issue revenue bonds on he projects named in the ordinance. An injunction was issued restraining defendant from entering into any contract for the sale of revenue bonds to or with the Public Works Administration of the federal government, and from issuing the contemplated bonds.

The parties agreed, with the approval of the trial court, upon the questions involved in the cause. The questions are set forth in the language of the stipulation:

(1) ‘Was Act No. 94, Public Acts of 1933, passed in full compliance with Article V, sections 19, 20, 21, 22 and 23 of the Michigan Constitution?’

By reference to the Senate and House Journals, the court determined that all formal and constitutional requirements had been properly complied with in the passage of the act. All parties agree with this finding.

The following questions have been covered and answered by the Young Case, which is controlling:

(2) ‘Does the title of said Act 94 embrace more than one object contrary to Article V, section 21 of the Michigan Constitution?’

(3) ‘Does the body of said Act No. 94 embrace subject matter not expressed in the title thereof nor germane thereto?’

(4) ‘Does Article X, section 14 of the Michigan Constitution apply to civil and political subdivisions of the State?’

(5) ‘Does said Act No. 94 authorize civil and political subdivisions of the State to engage in works of internal improvement contrary to Article X, section 14 of the Michigan Constitution?’

(6) ‘Does said Act 94 offend Article VIII, sections 23 and 31 of the Michigan Constitution in respect of creating public utilities not therein designated?’

(7) ‘Does said Act 94 create a public indebtedness in respect of authorizing a pledge of the net revenues of an existing public project to the payment of constructing, extensions, improvements, betterments, repairs and/or replacements thereto?’

(8) ‘Does said Act 94 authorize a statutory first lien upon the entire properties of said public project?’

(9) ‘Is said lien effective only as to the revenues derived from said project?’

(10) ‘Does said Act 94 authorize a public body to mortgage the revenues from said project as security for bonds issued therefor, and to confer a franchise to the purchaser at foreclosure to operate the same contrary to Article VIII, sections 25 and 29 of the Michigan Constitution?’

(11) ‘Does said Act 94 create and confer a franchise contrary to Article VIII, sections 25 and 29, of the Michigan Constitution in respect to authorizing a receiver to administer and operate such a project?’

The controlling cases involve sewage disposal plants, while the instant case pertains to a municipal harbor and park development It is therefore desirable to amplify the answer to question No. 4. Article 10, § 14, of the Constitution, reads: ‘The state shall not be a party to, nor be interested in any work of internal improvement, nor engage in carrying on any such work, except in the improvement, of, or aiding in the improvement of the public wagon roads, in the reforestation and protection of lands owned by the state and in the expenditure of grants to...