Gregory Marina, Inc. v. City of Detroit

• Decision Date: 24 August 1966
• Docket Number: No. 10,10
• Citation: 144 N.W.2d 503,378 Mich. 364
• Parties: GREGORY MARINA, INC., a Michigan corporation, and Kean Estates Corporation, a Michigan corporation, Plaintiffs and Appellees, v. CITY OF DETROIT, a municipal corporation, Defendant and Appellant.
• Court: Michigan Supreme Court

Page 503

144 N.W.2d 503

378 Mich. 364

GREGORY MARINA, INC., a Michigan corporation, and Kean Estates Corporation, a Michigan corporation Plaintiffs and Appellees, v. CITY OF DETROIT, a municipal corporation, Defendant and Appellant.

No. 10.

Supreme Court of Michigan.

Aug. 24, 1966.

Dykema, Wheat, Spencer, Goodnow & Trigg, Detroit, Donald E. Shely, Detroit, of counsel, for appellees and cross appellants

Robert Reese, Corp. Counsel, John H. Witherspoon, Roger P. O'Connor, Assts. Corp. Counsel, Detroit, for defendant and appellant.

Frank J. Kelley, Atty. Gen., Robert A. Derengoski, Sol. Gen., Nicholas V. Olds, Asst. Atty. Gen., Jerome Maslowski, Asst. Atty. Gen., Attorneys for Michigan State Waterways Commission, for State amicus curiae.

Before the Entire Bench.

KELLY, Justice.

Plaintiffs' challenge to the validity of defendant city of Detroit's right to construct a $1,365,000 marina on the Detroit river, resulted in a Wayne county circuit court order finding and holding that:

'(a) The case of Edward Gray, Inc. v. City of Detroit (Circuit Court for the county of Wayne, In Chancery, #175,077) is not res judicata and determinative of the issues in this cause, and '(b) The construction, operation and maintenance of the proposed city marina will constitute a public purpose, and

'(c) The city of Detroit is required under Title 3, Chapter 1, Section 12 of the Charter of the city of Detroit and also under Section 5(e) of the Home Rule Act, CL 1948, § 117.5(e), Stat Ann § 5.2084(e) to secure approval of three-fifths of the electors voting thereon at any general or special election before it engages in any business enterprise requiring an investment of money by the city in excess of ten cents per capita, and

'(d) The proposed city marina constitutes a business enterprise within the aforementioned provisions of the city charter and Home Rule Act, the cost to the city of which will exceed ten cents per capita, and

'(e) The vote requirements of the aforementioned city charter and Home Rule Act have not been amended, deleted or nullified by the Reveune Bond Act of or nullified by the Revenue Bond Act of et seq., Stat Ann § 5.2731 et seq., and

'(f) The city of Detroit having failed to secure approval of three-fifths of the electors in accordance with the aforementioned provisions of the city charter and Home Rule Act.

'It is ordered and adjudged that defendant, city of Detroit, its agents, servants, employees and attorneys be, and they hereby are enjoined and restrained from proceeding with the erection, construction, completion or operation of the proposed marina in George Engel Memorial Park and from proceeding with the execution, approval or performance of any contract or structural plan with respect thereto, until approved by the electors of the city of Detroit in accordance with the aforementioned provisions of the city charter and Home Rule Act.'

Appellees in a cross-appeal challenge the court's finding in paragraph (a), that the Gray Case is not res judicata, and the finding in paragraph (b) that the marina will constitute a public purpose. Appellant places in issue the court's finding under paragraph (f), namely, that the city must secure approval of three-fifths of the electors before constructing the proposed marina.

The State of Michigan through its Waterways Commission agreed on December 2, 1960, to pay one-half of the cost of construction of the proposed marina not to exceed $800,000. The Attorney General and the Michigan Association of Municipal Attorneys have filed briefs amicus curiae.

Plaintiff Kean Estates Corporation at the time of trial operated a 319 well marina on the Detroit river, at 100 Meadowbrook, Detroit; had completed 35 new wells during the last year or two and had 30 additional wells nearing completion. It paid approximately $24,000 in taxes to the city of Detroit in 1963.

Plaintiff Gregory Marina, Inc., has operated a marina on the Detroit river since 1914. At the time of trial it had 128 boat wells and in 1964 paid taxes to the city of Detroit in the approximate sum of $20,000.

Plaintiffs contend: (1) That the case of Edward Gray, Inc. v. City of Detroit is res judicata and determinative of the issues in this case; (2) That the construction, operation and maintenance of the proposed city marina is not for a public purpose because (a) the benefit is not available on equal terms to the entire public in the locality affected, and (b) the enterprise bears only remotely and circumstantially upon the public welfare; also (3) upon the public welfare; also (3) by three-fifths of the electors of the city of Detroit as required by the city charter.

Plaintiff in the case of Edward Gray, Inc. v. City of Detroit owned a parcel of In the Gray Case, the plaintiff sought an injunction to restrain the city of Detroit from constructing and operating a marina on another city park in Detroit. In this appeal, appellant, city of Detroit, admits in its brief that 'The city proposed (in the Gray Case) to operate the marina in substantially the same manner as it proposes to operate the marina in the present case.'

land known as 'Grayharbor,' which was involved in that case. The property of present plaintiff Gregory Marina, Inc. is located on the same parcel of land, namely, 'Grayharbor.'

In ruling against the city in the Gray Case on the question of whether the marina is for a public purpose--a main issue in this present appeal--the lower court stated:

'Can it be said that the construction of these wells is for the benefit of the general public or for the benefit of that portion of the public owning motor boats? I understand the rule to be that a public purpose is one where it is possible for all people of a class to have equal rights and equal use of the public improvement. That will not be true in this case. * * * The same condition would arise if, for instance, the city of Detroit constructed a public garage and then leased stalls in such garage to a certain number of owners of automobiles for a year or any definite or long extended time. Or, if the city of Detroit constructed a golf course, which they have done and there is no doubt of their authority to do so, and then sold exclusive memberships therein to a limited number of people so that the general golf playing public could not have access to the grounds. Possibly if these boat wells were to be operated for use from day to day or something of that sort, where the general public might have an opportunity to use them, the difficulty might be obviated. It is true on golf courses only a limited number of persons can play each day but at all times the public have equal opportunity to play on such courses. That would not be true and cannot be true in the present instance. * * * An entirely different state of facts exists under the proposed plan than would apply to the construction of golf courses or even wharves where any boat may tie up. It seems to me that the only reasonable deduction that can be drawn from the testimony in this case is that the city of Detroit is undertaking to construct at a large expense to taxpayers, boat wells for the permanent or semi-permanent use of an exceedingly limited number of individuals. Not only does this plan open the door to unjust discrimination and political maneuvering but it is taxing the general public for the benefit of a selected few of a large class of citizens.'

Present plaintiff Gregory Marina, Inc. claims it is in privity with plaintiff Gray by reason of ownership; that the city did not appeal the Gray judgment, and that we should apply the doctrine of res judicata as defined in Skinner v. Argentine Township Board, 238 Mich. 533, pp. 537, 538, 213 N.W. 680, p. 682, where we said:

'The doctrine of Res judicata is defined to be 'that an existing final judgment or decree rendered upon the merits, and without fraud or collusion, by a court of competent jurisdiction, upon a matter within its jurisdiction, is conclusive of the rights of the parties or their privies, in all other actions or suits in the same or any other judicial tribunal of concurrent jurisdiction, on the points and matters in issue in the first suit.' 15 R.C.L. (p 950), § 429.'

Defendant city answers by stating that because of changes in the law, namely, the enactment of the Revenue Bond Act of 1933, ¹ and decisions in Michigan and other jurisdictions upholding the right of cities to construct and operate marinas, the The Revenue Bond Act of 1933 defines public improvements to include 'yacht basins; harbors; docks; wharves.'

Gray Case does not control the issues in this cause.

The Revenue Bond Act of 1933 did not violate nor change the provisions of our Constitution which require municipal expenditures to be used for public or municipal purposes.

The Revenue Bond Act of 1933 does not change the law as to what constitutes a public purpose.

Defendant's motion for summary judgment involving the question as to whether the Revenue Bond Act overruled the Gray Case was denied with a correct summation by the trial court, as follows:

'The whole argument of the city of Detroit is based on the fact that the passage of the Revenue Bond Act of 1933 supersedes this case of Edward Gray, Inc. v. The City of Detroit. This Revenue Bond Act does grant authority to public corporations to construct yacht basins, harbors, docks, wharves, etc. However, this Revenue Bond Act must be construed to mean that the construction of these yacht basins, harbors, docks and wharves must be for a public purpose. Otherwise, this act would contravene the Constitution of the State of Michigan which says that cities cannot tax their people except for public purposes.'

After an extensive trial, all parties stress the importance of our decision. We agree that the question In re 'public purpose' should not be resolved on a circuit court level and, therefore, we are not agreeing with plaintiffs that we dispose of this appeal by finding that 'The case of Edward...