Shipp v. Southeastern Oklahoma Industries Authority, 45529

• Decision Date: 27 June 1972
• Docket Number: No. 45529,45529
• Citation: 498 P.2d 1395
• Parties: John SHIPP, Petitioner, v. SOUTHEASTERN OKLAHOMA INDUSTRIES AUTHORITY et al., Respondents.
• Court: Oklahoma Supreme Court

Page 1395

498 P.2d 1395

John SHIPP, Petitioner, v. SOUTHEASTERN OKLAHOMA INDUSTRIES AUTHORITY et al., Respondents.

No. 45529.

Supreme Court of Oklahoma.

June 27, 1972.

Syllabus by the Court

1. The State of Oklahoma possesses the authority to promote and encourage the development of industry and commerce within the state, and to further industrial, manufacturing, cultural, medical and/or educational activities within the state. Doing so are 'authorized' functions of the State of Oklahoma, as that term is used in 60 O.S.1961 and 1971 § 176.

2. The State of Oklahoma possesses the authority to provide facilities and services to aid in the control and reduction of pollution of the air, land and/or waters in the state, and to provide facilities and services for the transmission and disposal of sewage, waste and other deleterious substances. Doing so are 'authorized' functions of the State of Oklahoma, as that term is used in 60 O.S.1961 and 1971 § 176.

3. If engaging in the general kind of activity or transaction in question may reasonably be said to be included in the authority expressly conferred on the trust or the trustees in the instruments creating a public trust, such activity or transaction is 'expressly' authorized in the instruments, within the contemplation of 60 O.S.1961 and 1971 § 177.1.

Original proceeding.

Original proceeding in which petitioner asks court to assume jurisdiction and issue writ restraining and enjoining trustees of public trust of which State of Oklahoma is beneficiary from issuing or selling revenue bonds to provide funds for acquisition of 'pollution control' equipment to be installed as part of facilities for transmission and disposal of sewage, waste and other deleterious substances. Jurisdiction assumed; writ denied.

David M. Harbour, Oklahoma City, for petitioner.

James E. Work, Oklahoma City, of counsel, Shirk, Withington, Work & Robinson, Oklahoma City, for respondents.

LAVENDER, Justice.

This is an original proceeding in which John Shipp as a resident of McCurtain County, Oklahoma, seeks injunctive relief against a public trust, and the trustees thereof, designated as the 'Southeastern Oklahoma Industries Authority.' The State of Oklahoma is the designated beneficiary of the trust.

The trust was created by the Oklahoma State Chamber of Commerce, a corporation, and the beneficial interest therein was accepted upon behalf of the state by the governor thereof, in January of 1970, in accordance with the provisions of 60 O.S.1961 § 176 and following, as then amended and supplemented.

Section 176 provided, and provides:

'Express trusts may be created in real or personal property, or either or both, or in any estate or interest in either or both, with the state, or any county, municipality, political or governmental subdivision, or governmental agency of the state as the beneficiary thereof, * * *, or the providing of funds for the furtherance, of any authorized or proper function of the said beneficiary. * * *.'

A copy of the instrument creating the trust (hereinafter called the trust indenture) is included in the record by stipulation of the parties. As stated therein, the Basic and primary purposes of the trust are:

'To promote and to encourage the development of industry and commerce, and to further industrial, manufacturing, cultural, medical and educational activities within the territorial limits of that portion of the State of Oklahoma located in McCurtain, Choctaw, Pushmataha and LeFlore Counties, and in reasonably practical proximity thereto, By instituting, furnishing, providing and supplying physical facilities, improvements and services to the Beneficiary and to agencies, instrumentalities and subdivisions thereof and to inhabitants, owners and occupants of property, and to governmental, industrial, commercial and mercantile entities, establishments and enterprises, within said portion of the State of Oklahoma, to such extent and in such manner as now is or hereafter shall be a proper function of the State of Oklahoma as or if expressly authorized by law For the furtherance of the general convenience, welfare, public health, public safety, and economic development of said portion of the State and its inhabitants.' (Emphasis supplied)

Other expressed purposes of the trust are to acquire, construct, install, administer and operate any property or property rights designed or needful in instituting, providing or supplying any of the improvements, facilities and services mentioned in connection with its primary purposes, and to provide funds for doing so, including the incurring of indebtedness, either unsecured or secured by the trust's assets and/or revenues.

The other essential facts, bearing upon the main issues presented herein, are alleged in the proposed petition and in the brief in support thereof substantially as follows. Purportedly in furtherance of the purposes of the trust, the trustees have determined to construct certain facilities for the transmission and disposal of sewage, waste and other deleterious substances, and to provide services in connection therewith for compensation. They have also determined to issue and sell revenue bonds, in the aggregate principal amount of $10,000,000 to $15,000,000, to provide funds for the purchase and acquisition by the trust of certain capital equipment for 'pollution control' purposes. Such equipment is to be installed by the trust as a part of its proposed system for the transmission and disposal of sewage, waste and other deleterious substances. Net revenues from the facilities and services, after deducting expenses of operation, would be pledged to the payment of the bonded indebtedness.

Upon behalf of himself and all others similarly situated, the petitioner asks this court to assume jurisdiction and to perpetually restrain and enjoin the trustees and the Authority from taking any further steps to issue or sell any bonds or any other form of evidence of indebtedness, or incurring any form of indebtedness, to provide funds for the purchase, acquisition, or installation of any such 'pollution control' equipment.

In their briefs, the respondents say that the petitioner's statement of facts is essentially correct. However, it appears to be probable that the proceeds of the bonds would be used to finance the entire project contemplated by the trustees, and that they consider the entire project as being for 'pollution control.' We shall consider the matter in that light.

We consider the questions presented in this case to be of as much importance to the State of Oklahoma and the people thereof, and the need for an early determination of the questions to be as great, as in Fort v. Oklahoma Industries, Inc., et al. (1963), Okl., 385 P.2d 470, or in Meder v. City of Oklahoma City et al. (1960), Okl., 350 P.2d 916, or in Morris v. City of Oklahoma City et al. (1956), Okl., 299 P.2d 131. We assume jurisdiction on the basis of those cases.

In his third proposition, petitioner argues that the trust is void because of an alleged conflict of interest on the part of the individual trustees. However, in his principal contentions, he does not question the validity of a public trust with the State of Oklahoma as the beneficiary thereof, created for the basic purposes expressed in this trust indenture. He attacks only the authority of the trust to provide the facilities and services to be financed with proceeds of the proposed bonds. If he is correct on that point, the trust would not be authorized to incur any indebtedness, either secured or unsecured, to provide funds for the purchase or acquisition of such facilities.

His primary contention is that a trust with the State of Oklahoma as the beneficiary does not have that authority because the providing of 'pollution control' equipment and facilities is not an 'authorized' function of its governmental beneficiary.

He argues that governmental entities possess, and can exercise, only such powers and authority as have been granted to them by the Constitution and statutes of the state. The cases cited in support thereof involved the powers and authority of counties, cities or towns, and did not involve the powers and authority of the state.

He also argues that--regardless of the validity of the purposes for which a public trust is created under Section 176, supra--it can actually perform and/or provide funds for the performance of only such functions as its governmental beneficiary has, at the time of doing so, been Expressly authorized to perform. He says that, when properly interpreted, Board of County Commissioners of Oklahoma County et al. v. Warram et al. (1955), Okl., 285 P.2d 1034, and Board of County Commissioners of Oklahoma County et al. v. Oklahoma City (1971), Okl., 484 P.2d 882, support this argument. In each of those cases, a county was the beneficiary of the public trust involved.

Petitioner's argument would extend to the State of Oklahoma in its capacity as a state, principles of law concerning the powers and authority of bodies politic and corporate which owe their very existence, as such, to the Constitution and statutes of the state. Sections 1, 4 and 8 of Article 17, and Sections 1 and 2 of Article 18, Oklahoma Constitution. That cannot logically be done.

As such corporations, counties, cities and towns, have no in- herent power or authority, but possess, and can exercise,...