Scanlon v. City of Menasha

• Decision Date: 01 May 1962
• Citation: 114 N.W.2d 791,16 Wis.2d 437
• Parties: John R. SCANLON, Appellant, v. The CITY OF MENASHA, a municipal corporation, et al., Respondents.
• Court: Wisconsin Supreme Court

Page 791

114 N.W.2d 791

16 Wis.2d 437

John R. SCANLON, Appellant, v. The CITY OF MENASHA, a municipal corporation, et al., Respondents.

Supreme Court of Wisconsin.

May 1, 1962.

This is an appeal by the plaintiff John R. Scanlon from the dismissal of his complaint on its merits. Scanlon, a taxpayer and resident of the city of Menasha, brought this action against the defendant The City of Menasha, R. G. DuCharme and Ira H. Clough, its mayor and city clerk respectively, to declare illegal and void certain resolutions of the common council of Menasha relating to the sale of 11 city lots to the defendant The First National Bank of Menasha and providing for the purchase by the city of the bank building located adjacent to the present city hall. The complaint also sought to have declared null and void the agreements entered into in contemplation of the approval of said resolutions and to enjoin the defendants from carrying out the transaction. The trial court found the resolutions were validly enacted, the agreement did not violate the statutes of fraud, and the common council did not abuse its discretion in approving what amounted to an exchange of property plus the payment of $7,500 to the city and dismissed the complaint.

For many years the City of Menasha owned the property on Racine street, which prior to 1936 had been used for a school and playground. In that year the school building was destroyed by fire and since that time the land had been used generally for playground purposes and other municipal purposes. A small building located on the premises had been leased to the American Legion and various other public organizations when its use was not required by the park commission which has had general supervision of the property during the last 20 years. Prior to 1957 the city created, pursuant to sec. 62.23, Stats., a City Plan Commission. In December of 1957, the common council of Menasha adopted an official map in which the area between First and Second streets lying west of Racine street, which included the property in question, was designated as a park. During the same month, the common council amended its zoning ordinance by changing the area from a residential district to a commercial district.

Sometime in December of 1959 or the early part of January, 1960, some officials of the defendant bank consulted with certain city officials concerning the possible exchange of the defendant's bank building for the so-called park property on Racine street. After various conferences between the two groups, the question was put before the common council. The common council passed a resolution on February 2, 1960, stating the school site was no longer needed for public purpose and the public interest would be better served if the property were sold for commercial purposes, and certain city officials were authorized to work out the terms and conditions of the sale subject to the approval of the common council. On February 16 the common council passed two resolutions, which are under attack in this suit; one authorized the sale of the 11 lots for $57,000 to the defendant bank and the other the purchase of the old bank building for $49,500. Proposed agreements, which were later executed, were attached to the resolutions and approved. The resolutions made other provisions for the earmarking of the money, for taking possession of the property, and for the dependency of each resolution upon the other.

Prior to the passage of these resolutions, the contemplated transaction was not submitted to the City Plan Commission and no appraisals were made on behalf of either the bank or the city to determine the value of the respective properties.

During the discussion between the officials of the bank and the city of Menasha, there was some talk of the contemplated use of the so-called park property by the bank. It was understood the bank was to build a new bank building on the property and use part of the lots for parking facilities. The balance of the property might be sold to commercial enterprises which would improve the downtown shopping area. However, at the time of this transaction, the bank had no plans completed for its building nor did it make any determination of the number of lots which would be required for banking facilities.

On this appeal, the City of Menasha did not participate and filed no brief.

Cooke & Loehning, Neenah, Henry P. Hughes, James R. Hebbe, Oshkosh, of counsel, for appellant.

Melvin F. Crowley, Menasha, Harvey C. Hartwig, Milwaukee, of counsel, for respondents.

HALLOWS, Justice.

Three issues are raised on this appeal, but in view of the disposition we make of the first question, it is unnecessary to consider the other two. The basic question is whether the resolutions passed by the common council of the City of Menasha and the agreements executed by the parties were illegal and void because of the failure of the common council to first refer the transaction to the City Plan Commission under sec. 62.23(5), Stats. We have come to the conclusion that the resolutions and agreements are void.

The trial court held the provisions of sec. 62.23(5), Stats., ¹ were discretionary and not mandatory and did not limit the general grant of powers of the common council as declared in sec. 62.11(5), Stats.

The appellant argues the express language in sec. 62.23(5), Stats., by using the word 'shall' requires the common council to submit to the commission the propriety of the sale of the so-called park property before taking final action. The defendant bank contends, in considering other sections of the statute relating to the city council's broad powers and the history and scope of sec. 62.23(5), the word 'shall' in that section must be construed as having a discretionary meaning and not a mandatory one. This argument is further advanced by the contention the majority of the members of the City Plan Commission represents the administration in control of the city since there are four city officials and only three citizens composing the commission, and thus the legislative intention could be inferred that a referral to the commission was not a jurisdictional prerequisite to the power of the council.

We must start with the proposition that a sale of the so-called playground property was a matter within the scope of the functions of the City Plan Commission. Since the transaction was in substance and was so treated by the parties as an exchange of the park property for the bank property and $7,500 boot money, the entire transaction fails if the common council is required to submit the sale of city property to the planning commission under sec. 62.23(5), Stats.

A city council has power to sell public property under the powers granted by sec. 62.22(1), Stats., and the city is not required to have a city plan commission. At least three years before this transaction took place, the City of Menasha did provide for a city plan commission and thus the statutory requirements of sec. 62.23(5), Stats., must qualify the exercise of the council's powers which deal with matters within this section. In dealing with public property, a municipality is subject to such restrictions and limitations as the legislature may impose. Wisconsin Gas & Electric Co. v. City of Fort Atkinson (1927), 193 Wis. 232, 213 N.W. 873, 52 A.L.R. 1033.

In construing sec. 62.23(5), Stats., we must ascertain the legislative intention as disclosed by the language of the statute in relation to its scope, history, context, subject matter and the object intended to be remedied or accomplished. Worachek v. Stephenson Town School Dist. (1955), 270 Wis. 116, 70 N.W.2d 657. The powers granted a city council to manage and control city property and to act for the good order of the city and for the health, safety and welfare of the...