Schmidt v. Department of Resource Development

• Decision Date: 07 May 1968
• Citation: 39 Wis.2d 46,158 N.W.2d 306
• Parties: Alfred J. SCHMIDT et al., Appellants, v. DEPARTMENT OF RESOURCE DEVELOPMENT, Respondent.
• Court: Wisconsin Supreme Court

Page 306

158 N.W.2d 306

39 Wis.2d 46

Alfred J. SCHMIDT et al., Appellants, v. DEPARTMENT OF RESOURCE DEVELOPMENT, Respondent.

Supreme Court of Wisconsin.

May 7, 1968.

Quarles, Herriott, Clemons, Teschner & Noelke, Milwaukee, L. C. Hammond, Jr., and George K. Whyte, Jr., Milwaukee, of counsel, for appellants.

Bronson C. La Follette, Atty. Gen., William F. Eich, Asst. Atty. Gen., Madison, for respondent.

BEILFUSS, Justice.

This appeal presents three issues for determination:

1. Does sec. 66.016(1)(a) and (b), Stats., constitute an invalid delegation of legislative power to the director?

2. Do the appellants have standing to attack the constitutionality of secs. 66.016(2) or 66.014(9)(e) 3?

3. Did the director act in excess of his authority by stating that the town of Salem had no 'dominant' community center?

Section 66.016, Stats., states:

'Standards to be applied by the director. (1) The director may approve for referendum only those proposed incorporations which meet the following requirements:

'(a) Characteristics of territory. The entire territory of the proposed village or city shall be reasonably homogeneous and compact, taking into consideration natural boundaries, natural drainage basin, soil conditions, present and potential transportation facilities, previous political boundaries, boundaries of school districts, shopping and social customs. An isolated municipality shall have a reasonably developed community center, including some or all of such features as retail stores, churches, post office, telephone exchange and similar centers of community activity.

'(b) Territory beyond the core. The territory beyond the most densely populated square mile specified in s. 66.015 shall have in an isolated municipality an average of more than 30 housing units per quarter section or an assessed value, as defined in s. 66.021(1)(b) for real estate tax purposes, more than 25 per cent of which is attributable to existing or potential mercantile, manufacturing or public utility uses; but the director may waive these requirements to the extent that water, terrain or geography prevents such development. Such territory in a metropolitan municipality shall have the potential for residential or other land use development on a substantial scale within the next 3 years.

'(2) In addition to complying with each of the applicable standards set forth in sub. (1) and s. 66.015, any proposed incorporation in order to be approved for referendum must be in the public interest as determined by the director upon consideration of the following:

'(a) Tax revenue. The present and potential sources of tax revenue appear sufficient to defray the anticipated cost of governmental services at a local tax rate which compares favorably with the tax rate in a similar area for the same level of services.

'(b) Level of services. The level of governmental services desired or needed by the residents of the territory compared to the level of services offered by the proposed village or city and the level available from a contiguous municipality which files a certified copy of a resolution as provided in s. 66.014(6).

'(c) Impact on the remainder of the town. The impact, financial and otherwise, upon the remainder of the town from which the territory is to be incorporated.

'(d) Impact on the metropolitan community. The effect upon the future rendering of governmental services both inside the territory proposed for incorporation and elsewhere within the metropolitan community. There shall be an express finding that the proposed incorporation will not substantially hinder the solution of governmental problems affecting the metropolitan community.'

Sec. 66.014(9), Stats., states in part:

'(9) Function of the Director. (a) Upon receipt of the petition from the circuit court the director shll make such investigation as may be necessary to apply the standards under s. 66.016.

'* * *

'(e) The determination of the director made in accordance with the standards under ss. 66.015, 66.016 and 66.021(11)(c) shall be either:

'1. The petition as submitted shall be dismissed;

'2. The petition as submitted shall be granted and an incorporation referendum held;

'3. The petition as submitted shall be dismissed with a recommendation that a new petition be submitted to include more or less territory as specified in the director's findings and determination.'

The introductory sentence of sec. 66.016(1), Stats., provides that '(t)he director may approve for referendum only those proposed incorporations which meet the following requirements.' (Emphasis supplied.) Appellants contend the use of the word 'may' rather than 'shall' vests the director with complete discretion to dismiss the petition regardless of whether or not it meets the requirements that follow. The trial court, however, construed the term as 'shall.'

We agree with the trial court's construction. While generally the word 'may' in a statute will be construed as permissive, it will not be so construed where a different construction is demanded by the statute in order to carry out the intent of the legislature. City of Wauwatosa v. Milwaukee County (1963) 22 Wis.2d 184, 125 N.W.2d 386. In the statute under consideration the term 'may' is followed by the restrictive word 'only.' Because it is followed by the limiting word 'only,' the context is 'may only' which creates a restriction on the director. To say that the director has absolute discretion to deny any petition simply because he 'may' not grant those which fail to meet the requirements is not a reasonable construction to place on the statute and is reading the word 'may' out of its statutory context. While the statute may give to the director some discretion, it does not give him authority to reject a petition arbitrarily, capriciously or without reason.

The appellants next urge that sec. 66.016(1)(a) and (b), Stats., does not provide definite standards and consequently vests an unconstitutional degree of legislative authority in the director. The appellants place strong reliance upon the case of In re Incorporation of Village of North Milwaukee (1896), 93 Wis. 616, 67 N.W. 1033, which invalidated an incorporation statute. The statute considered in that case provided for a delegation to the circuit court of the power to determine whether 'the lands embraced in such territory or any part thereof ought justly to be included in the proposed village' and whether 'the interest of the inhabitants will be promoted by such incorporation.' Sec. 861, Stats. of 1878. The statute further provided that the court could enlarge or diminish the boundaries 'as justice may require.'

This court held that statute constituted an unlawful delegation of legislative power to the judiciary:

'The sum and substance of the law is this: Villages may be incorporated if the circuit court thinks best. This amounts to nothing more nor less than the vesting in the court of the powers of a third house of the legislature, which must be exercised in the affirmative before a village can exist. The legislature has passed the law, the governor has signed it, and it has gone on the statute book, but the circuit judge in every case must add his concurrence before it is operative. The question as to whether incorporation is for the best interest of the community in any case is emphatically a question of public policy and statecraft, not in any sense a judicial question; and in attempting to submit that question to the decision of the circuit court the legislature has undoubtedly done that which the constitution forbids * * *.

'That part of the section, also, which places the whole question of the boundaries of the proposed village under the control of the court is equally objectionable. This also vests in the court, without appeal, the decision of the entire question as to what territory, and consequently what people, shall comprise the new village. Here, again, the court must decide the question of political expediency, which is very plainly a question to be decided by the legislative branch of the government alone.' In re Incorporation of Village of North Milwaukee, supra, at p. 624, 67 N.W. at p. 1036.

Recently this court had occasion to consider the same type question as involved in North Milwaukee. In the case of In re City of Beloit (1968), 37 Wis.2d 637, 155 N.W.2d 633, the court held unconstitutional sec. 66.021(11)(b), Stats., dealing with annexations as an unauthorized delegation of legislative power to the judiciary. Sec. 66.021(11)(b) provided that the circuit court determine whether or not the annexation was in the public interest. In finding what was the 'public interest' the circuit court was limited to considering the availability of government service and 'the shape of the proposed annexation and homogeneity of the territory with the annexing village or city and any other contiguous village or city.' Sec. 66.021(11)(c) 2. The court, however, did not find this a definite enough standard to sustain the validity of the section.

The court, in the Beloit Case, p. 644, 155 N.W.2d p. 636, sets forth the criteria governing what will constitute an invalid delegation to the judiciary:

'What is 'desirable' or 'advisable' or 'ought to be' is a question of policy, not a question of fact. What is 'necessary' or what is 'in the best interest' is not a fact and its determination by the judiciary is an exercise of legislative power when each involves political considerations and reasons why there should or should not be an annexation. This is the general and universal rule which sharply draws the differentiating line between legislative power and judicial power and by which the validity of the delegation of functions to the judiciary by the legislature is determined.'

The North Milwaukee Case and Beloit Case must be distinguished from the instant action on two grounds. First, the provisions of sec. 66.016(1)(a), Stats., are not as broad as the provisions under consideration...