Laret Inv. Co. v. Dickmann

Decision Date05 December 1939
Docket Number36925
Citation134 S.W.2d 65,345 Mo. 449
PartiesLaret Investment Company, a Corporation, Appellant, v. Bernard F. Dickmann, Mayor of the City of St. Louis; Louis Nolte, Comptroller of the City of St. Louis; Michael J. Cullinane, City Register of the City of St. Louis; Housing Authority, of the City of St. Louis, a Corporation, and William C. Connett, Joseph J. Hauser, Frank L. Williams, Luella B. Sayman and H. H. Handlan, Commissioners of said Housing Authority, of the City of St. Louis
CourtMissouri Supreme Court

Appeal from Circuit Court of City of St. Louis; Hon. Ernest F Oakley, Judge.


Frank E. Morris for appellant.

(1) A municipal corporation is an instrumentality of the State formed for a public purpose. Dillon on Municipal Corporations (5 Ed.), sec. 32; State ex rel. Caldwell v. Little River Drain. Dist., 291 Mo. 72, 236 S.W. 15; State ex rel Kinder v. Little River Drain. Dist., 291 Mo. 267, 236 S.W. 848. (2) The declaration of the Legislature as to what constitutes a public purpose is not conclusive, but the question is open for review by the courts. State ex rel. Douglas County v. Cornell, 53 Neb. 556, 74 N.W. 59; Halbruegger v. St. Louis, 302 Mo. 573, 262 S.W. 379; Wells v. Housing Authority, 213 N.C. 744, 197 S.E. 693. (3) The clearance, replanning and reconstruction of slum areas and the providing of safe and sanitary dwelling accommodations for persons of low income is not a public purpose and does not constitute a proper governmental function. Opinion of Justices, 211 Mass. 624, 98 N.E. 611; United States v. Certain Lands, 78 F.2d 684; State ex rel. Kansas City v. Orear, 277 Mo. 303, 210 S.W. 392; Kennedy v. Nevada, 281 S.W. 56.

Edgar H. Wayman for respondents.

(1) The term "municipal corporation," as used in Section 6 of Article X of the Missouri Constitution, is not to be applied in its strict sense as referring only to incorporated cities, but is used in its broader sense as including any agency of the State performing an essential governmental function. State ex rel. Kinder v. Little River Drain. Dist., 291 Mo. 267, 236 S.W. 848; State ex rel. Caldwell v. Little River Drain. Dist., 291 Mo. 72, 236 S.W. 15; Grand River Drain. Dist. v. Reid, 111 S.W.2d 151; School District of Oakland v. School Dist. of Joplin, 102 S.W.2d 910; Harris v. Bond Co., 244 Mo. 689. (2) While the declaration of the Legislature as to what constitutes a public purpose is not conclusive, nevertheless the courts will not overturn such legislative declaration unless the court is clearly satisfied that error has been committed. Halbruegger v. St. Louis, 262 S.W. 381; Jennings v. St. Louis, 332 Mo. 178. (3) When the Legislature, in a law, makes findings, the courts will presume that such findings are based upon evidence satisfactory to the Legislature. What that evidence was the courts do not feel at liberty to inquire. State v. Tower, 185 Mo. 85; Ex parte Renfrow, 112 Mo. 595; State v. Hedrick, 241 S.W. 421. (4) The Missouri Housing Act creates a municipal corporation, the activities of which constitute a public purpose for public benefit. New York Housing Authority v. Miller, 270 N.Y. 333; Dornan v. Philadelphia Housing Authority 200 A. 834; Marvin v. Housing Authority of Jacksonville, 183 So. 145; Wilson v. Housing Authority, 199 S.E. 43; Krause v. Peoria Housing Authority, 199 N.E.2d 193; Edwards v. Housing Authority of Muncie, 19 N.E.2d 741; Spahn v. Stewart, 268 Ky. 97, 103 S.W.2d 651; Porterie, Atty. Gen. State of Louisiana, v. Housing Authority of New Orleans, 190 La. 710, 182 So. 725; Rutherford v. Great Falls, 86 P.2d 656; Wells v. Housing Authority of Wilmington, 213 N.C. 744, 197 S.E. 693; McNulty v. Owens, 188 S.C. 377, 199 S.E. 425; Knoxville Housing Authority v. Knoxville, 123 S.W.2d 1085. (5) Housing Authorities are municipal corporations within the meaning of the Constitution of Missouri, and therefore entitled to tax exemption. State ex rel. Kinder v. Little River Drain. Dist., 291 Mo. 267, 236 S.W. 848; State ex rel. Caldwell v. Little River Drain. Dist., 291 Mo. 72, 236 S.W. 15; Grand River Drain. Dist. v. Reid, 111 S.W.2d 151; Rutherford v. Great Falls, 86 P.2d 656; In re Opinion of Justices, 179 So. 535; Wells v. Housing Authority of Wilmington, 197 S.E. 692.

Jones, Hocker, Gladney & Grand, Jos. H. Grand and Lon Hocker, Jr., amici curiae, in behalf of St. Louis Real Estate Exchange, O'Fallon Park Protective Association, and Building Owners' & Managers' Association of St. Louis, Inc.

Each case must make its own decision, and the test is: Does the classification bear a reasonable relation to the subject of the legislation? We take this elementary rule to be conceded, and, because of the status of our clients in this litigation, we do not feel we should quote extensively from the authorities. But, in addition to the last two cases above cited, excellent discussion of the rule can be found in the following cases: Woolley v. Mears, 226 Mo. 41, 125 S.W. 1112; State ex rel. v. Miller, 100 Mo. 439, 13 S.W. 677; Murnane v. St. Louis, 123 Mo. 491, 27 S.W. 711; State ex rel. v. Lee, 319 Mo. 976, 5 S.W.2d 83; Dunne v. Kansas City Ry. Co., 131 Mo. 1, 32 S.W. 641; Ex parte Loving, 178 Mo. 194, 77 S.W. 508.


Clark, J.

Appeal from the Circuit Court of St. Louis City. The suit is to enjoin the execution of a certain agreement, called a "Cooperation Agreement," between the City of St. Louis and the Housing Authority of the City of St. Louis, on the ground that said agreement attempts, in violation of the Missouri Constitution, to exempt the property of the Housing Authority from taxation. Defendants jointly demurred to the petition on the ground that it did not state a cause of action; the chancellor sustained the demurrer and, plaintiff declining to plead further, entered a decree dismissing the petition. Plaintiff has appealed.

The sole issue raised in the petition is whether the property of the Housing Authority of the City of St. Louis is exempt from taxation.

The Missouri Constitution, Article X, Section 6, provides: "The property, real and personal, of the State, counties and other municipal corporations . . . shall be exempt from taxation." Section 7 of the same article reads: "All laws exempting property from taxation, other than the property above enumerated, shall be void."

Plaintiff's petition shows that the Housing Authority is a corporation duly organized pursuant to an Act of the General Assembly approved May 15, 1939, and published in the Session Acts for 1939 on pages 488-502, inclusive. The petition also shows that the City of St. Louis has, by ordinance, duly declared the need for a housing authority in said city, which has a population of more than 600,000.

The Housing Act of 1939 declares: that within the State there is a shortage of safe or sanitary dwelling accommodations available at rents which persons of low income can afford; that such persons are forced to occupy overcrowded, congested, unsanitary and unsafe dwelling accommodations; that this causes an increase in and spread of disease and crime and constitutes a menace to the health, safety, morals and welfare of the residents of the State and impairs economic values, necessitating excessive expenditures of public funds for crime prevention and punishment, public health and safety, fire and accident protection and other public services; that these areas in the State cannot be cleared, nor the shortage of safe and sanitary dwellings for such persons be relieved, through the operation of private enterprise, and that construction of housing projects for such persons would therefore not be competitive with private enterprise; that the clearing, replanning and reconstruction of such unsanitary, etc., areas are public uses and purposes for which public money may be spent and private property acquired and are governmental functions of State concern; that it is in the public interest that work on such projects be commenced as soon as possible in order to relieve employment which now constitutes an emergency; that the necessity in the public interest for the provisions of the Act is declared as a matter of legislative determination.

The Act is made to apply to cities having a population of 600,000 or more, but only when the governing body of such city, in a specified manner, shall declare the need for a housing authority; certain terms are defined, including "slum," "housing project," "persons of low income," etc.; a Housing Authority is created as "a municipal corporation, exercising public and essential governmental functions," having certain defined powers; the manner of the organization and operation of the Authority is set forth in detail; it is given power to acquire property, by purchase, donation, lease or condemnation; to issue bonds secured by pledge of its revenues or mortgage on its property and to cooperate with agencies of the government of the United States in carrying out the purposes of the Act and Federal enactments, borrow money and accept grants from the Federal government; it may make investigations as to housing and sanitary conditions and carry out projects of slum clearance and construction of sanitary dwellings; the amount of rent that may be charged tenants is proportioned to their income; careful provision is made that the Authority shall not be operated for profit nor as a source of revenue to the city; the real property of the Authority is exempted from sale under execution; the Authority is made subject to planning, zoning, sanitary and building laws, ordinances and regulations applicable to the locality in which any housing project is situated.

The Act does not expressly provide that the property of the Authority shall be exempt from taxation, but does expressly declare that the Authority is a municipal...

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