Harrison v. Claybrook

• Decision Date: 12 June 1962
• Docket Number: No. 40009,40009
• Citation: 372 P.2d 602
• Parties: Wilbanks HARRISON, Plaintiff in Error, v. G. W. CLAYBROOK, C. W. Hill and Lois Bishop, Trustees of The Wewoka Municipal Improvement Authority; and The City of Wewoka, a Municipal Corporation, Defendants in Error.
• Court: Oklahoma Supreme Court

Page 602

372 P.2d 602

1962 OK 143

Wilbanks HARRISON, Plaintiff in Error, v. G. W. CLAYBROOK, C. W. Hill and Lois Bishop, Trustees of The Wewoka Municipal Improvement Authority; and The City of Wewoka, a Municipal Corporation Defendants in Error.

No. 40009.

Supreme Court of Oklahoma.

June 12, 1962.

Syllabus by the Court.

1. The Wewoka Municipal Improvement Authority is a public corporation, with limited powers, and its purpose is such as to be deemed both a public, and a delegated State, function, authority by Art. II, Section 31 of the Oklahoma Constitution.

2. Provisions of the Oklahoma Constitution applicable to the appropriation of public funds and the incurring of debts by this State's municipalities do not render said Authority, or its trust instrument, invalid.

Appeal from the District Court of Seminole County; Bob Howell, Judge.

Action by the Improvement Authority, as plaintiff, against the City of Wewoka, as defendant, for determination of certain questions about the trust instrument under which the Authority was created, and the operation and legality of said Authority. After intervention by one of Wewoka's residents and taxpayers, and a judgment favorable to the Authority, the intervenor appealed. Affirmed.

S. W. Bill Biggers, Wewoka, for plaintiff in error.

A. C. Kidd, City Atty. of the City of Wewoka, Leon S. Hirsh, James C. Harkin, Paul Johanning, Oklahoma City, for defendants in error.

BLACKBIRD, Vice Chief Justice.

G. W. Claybrook, C. W. Hill, and Lois Bishop, Trustees of a so-called 'public trust', named 'The Wewoka Municipal Improvement Authority' (hereinafter referred to merely as the 'Authority') instituted this action as plaintiffs, under authority of Tit. 60 O.S.1961 § 175.23 against The City of Wewoka, as defendant, to obtain an adjudication as to certain matters with reference to said Authority, which was admittedly created to assist said defendant city in obtaining industrial development under the Local Industrial Development Act, Tit. 62 O.S.1961 § 651 et seq.

To the petition of said Trustees, hereinafter referred to as plaintiffs, was attached a copy of the Declaration of Trust creating the Authority, usually referred to as the 'trust instrument.' Said petition alleged, inter alia, the following:

'II.

'The trustees of the aforesaid trust, at the request of the Board of City Commissioners of the said City, propose to enter upon a project for securing and developing industry within and near the said municipality in accordance with the provisions of the Local Industrial Development Act, Title 62, secs. 651-664, Oklahoma Statutes 1961, and with Title 60, sections 176-180, Oklahoma Statutes 1961, in the following:

'(a) The said Trustees propose to arrange for acquisition of real estate necessary for the construction thereon of an industrial building, and for the construction thereon of such building, all from the proceeds of revenue bonds as provided in said Local Industrial Development Act, and/or first mortgage bonds as provided in the Declaration of Trust attached hereto as Exhibit 1; and, in the event that the issuance of the said bonds are authorized by the electors qualified to vote thereon, then to carry the aforesaid project to completion.

'(b) The said Trustees further propose to enter into preliminary arrangements for leasing the abovementioned industrial plant to a clothing manufacturing company for an annual rental adequate to retire the obligations incurred as aforesaid and also to provide adequate upkeep of the said plant and to defray any other expense necessary to be paid in connection therewith; and, in the event of the approval of the electors as aforesaid, to complete said lease.

'III.

'It is shown that the commencement of the said project as above outlined, and the holding of the election as provided in the said Local Industrial Development Act and/or in the said Declaration of Trust will entail the expenditure of a substantial sum from the trust estate and, unless the aforesaid project shall be authorized or proper, as provided either by Title 60, section 176, supra, or by the said Local Industrial Development Act, said expenditures would constitute a dissipation of the trust estate.

'WHEREFORE, the plaintiffs pray:

'(1) The Court to construe the provisions of the trust instrument hereto attached to determine the law applicable thereto in relation to the aforesaid project;

'(2) The Court define the powers, duties and liability of the trustees of said trust in relation to implementation of said project and in expending trust funds in connection therewith; and

'(3) The Court determine specifically (a) whether or not the aforesaid project is a project in which a trust created under the aforesaid statutes may engage, and (b) the validity of the said Local Industrial Development Act in relation to any applicable provision of the Constitution of the State of Oklahoma.'

After the filing of the above-described pleading, Wilbanks Harrison, a resident, taxpayer, and qualified elector, of the defendant City intervened, challenging the constitutionality of the Local Industrial Development Act, supra, and alleging that the project described in plaintiff's petition '* * * is not an authorized or proper function of the beneficiary, City of Wewoka, and not a proper purpose for the trust alleged by the plaintiffs.' Harrison, hereinafter referred to as intervenor 'prayed * * * that the Court order and adjudge the plaintiffs to be without right, power or authority to enter upon the project * * * or to expend trust money for * * *' its furtherance.

In its answer, the defendant City admitted all allegations of fact contained in defendant's petition.

When the cause was tried, the court rendered judgment for the plaintiffs in accord with certain findings of fact and conclusions of law, filed therein. From said judgment, the Intervenor has lodged the present appeal, and advances his arguments for reversal under two propositions, the first of which is as follows:

'MUNICIPALITIES IN OKLAHOMA MAY NOT BE AUTHORIZED TO ENGAGE IN ANY BUSINESS WHICH, IF CONDUCTED BY PRIVATE INTERESTS, WOULD NOT REQUIRE THE GRANT OF A FRANCHISE.'

Under this proposition, intervenor contends that, in Oklahoma, a municipality's right to engage in business is limited by Section 6, Article XVIII of this State's Constitution to businesses, or enterprises, that may be engaged in, under a franchise permit from it, by a person, firm, or corporation; that such businesses or enterprises are only those contemplated in that Article's Section 5(a); and that the declared purposes of the Authority clearly do not come within the scope of the latter Constitution provision. Plaintiffs argue, on the other hand that, conceding the cited provision of Article XVIII to constitute the effectual limitation claimed by intervenor, the City of Wewoka, in the present case, does not propose to engage in the acquisition of real estate, or construction of a building, or the leasing of them, to a...