State ex rel. Hammermill Paper Co. v. La Plante

• Decision Date: 09 April 1973
• Docket Number: No. S,S
• Citation: 205 N.W.2d 784,58 Wis.2d 32
• Parties: STATE ex rel. HAMMERMILL PAPER CO. et al., Petitioners, v. Robert L. La PLANTE, Mayor, City of Kaukauna, Respondent. tate 180.
• Court: Wisconsin Supreme Court

Page 784

205 N.W.2d 784

58 Wis.2d 32

STATE ex rel. HAMMERMILL PAPER CO. et al., Petitioners, v. Robert L. La PLANTE, Mayor, City of Kaukauna, Respondent.

No. State 180.

Supreme Court of Wisconsin.

April 9, 1973.

Maurice J. McSweeney, Richard A. Weiss, and Richard H. Porter, Milwaukee, for petitioners; Foley & Lardner, Milwaukee, of counsel.

Shea, Hoyt, Greene, Randall, Meissner & Walsh, S.C., Milwaukee, for respondent; William L. Randall and Thomas E. Whipp, Milwaukee, of counsel.

Robert W. Warren, Atty. Gen., Allan P. Hubbard, Asst. Atty. Gen., for the State of Wisconsin.

CONNOR T. HANSEN, Justice.

The following issues are presented:

1. Does the issuance by a municipality of revenue bonds to finance industrial development projects constitute the expenditure of public funds for other than a public purpose?

2. Is the authorization of a municipality to engage in industrial development projects an unlawful delegation of a matter of state-wide interest to a municipality in violation of sec. 22, art. IV, or sec. 1, art. IV of the constitution?

3. Does sec. 66.521, Stats., involve the state in works of 'internal improvement' in violation of sec. 10, art. VIII of the constitution?

4. Does sec. 66.521, Stats., constitute a loan of the state's credit to a private party in violation of sec. 3, art. VIII of the constitution?

5. Does the issuance of municipal revenue bonds constitute a state indebtedness for a purpose not authorized by secs. 4 and 7, art. VIII of the constitution or a municipal debt in violation of sec. 3, art. XI of the constitution?

6. Is the lease provision granting Hammermill an option to renew the lease or to purchase the project in violation of sec. 66.521(3)(c), Stats., or beyond the power of the municipality and in contradiction to sec. 3(a), art. XI of the constitution?

7. Is sec. 66.521(9), Stats., which provides that the tax upon the project property shall not constitute a lien upon the property, in violation of sec. 1, art. VIII of the constitution, which requires uniformity of taxation?

8. Does the limitation of the benefits of sec. 66.521, Stats., of 'industrial enterprises' deny to nonindustrial enterprises the equal protection of laws under sec. 1, art. I of the Wisconsin Constitution and the fourteenth amendment of the United States Constitution?

9. Does sec. 66.521, Stats., authorize the issuance of bonds for the purchase of pollution abatement equipment?

10. Is the lease between Hammermill and the City in violation of sec. 66.521(3)(c), Stats., in that the rental reserved therein is insufficient to provide for an adequate depreciation account?

11. Is the provision of the Mortgage And Indenture of Trust permitting Hammermill to purchase the property contingent upon happening of certain events and payment of the bonds from the proceeds of such sale in violation of sec. 66.521(4)(a), Stats.?

12. Does the provision in the Project Purchase And Financing Agreement authorizing a private placement of the bond issue violate sec. 66.521(4)(d), Stats.?

13. Is the authority invested in the trustee by the Mortgage And Indenture of Trust an unlawful delegation of municipal authority by the City?

The respondent carries a heavy burden if he is to prevail in his attack upon the constitutionality of sec. 66.521, Stats. It is not enough that respondent establish doubt as to the act's constitutionality nor is it sufficient that respondent establish the unconstitutionality of the act as a probability. Unconstitutionality of the act must be demonstrated beyond a reasonable doubt. Every presumption must be indulged to sustain the law if at all possible and, wherever doubt exists as to a legislative enactment's constitutionality, it must be resolved in favor of constitutionality. This court has often affirmed the well-established presumption of constitutionality that attaches itself to all legislative acts. In ABC Auto Sales, Inc. v. Marcus (1949), 255 Wis. 325, 330, 331, 38 N.W.2d 708, 710, this court stated:

'. . . (T)here are applicable in this case the rules (1) that the statute is presumed to be constitutional and will be held unconstitutional only if it appears so beyond a reasonable doubt. Payne v. Racine, 217 Wis. 550, 561, 562, 259 N.W. 437; Gibson Auto Co. v. Finnegan, 217 Wis. 401, 412, 413, 259 N.W. 420; Petition of Breidenbach, 214 Wis. 54, 60, 252 N.W. 366; and (2) that the burden of establishing the unconstitutionality of a statute is on the person attacking it, who must overcome the strong presumption in favor of its validity. 11 Am.Jur., Constitutional Law, p. 795, sec. 132.

'As stated in State ex rel. Carnation M.P. Co. v. Emery, 178 Wis. 147, 160, 189 N.W. 564:

"If there is any reasonable basis upon which the legislation may constitutionally rest, the court must assume that the legislature had such fact in mind and passed the act pursuant thereto. The court cannot try the legislature and reverse its decision as to the facts. All facts necessary to sustain the act must be taken as conclusively found by the legislature, if any such facts may be reasonably conceived in the mind of the court.'

'And as stated in Gibson Auto Co. v. Finnegan, supra (217 Wis. p. 406, 259 N.W. 420):

". . . under our system of government the court is not called upon to consider the economic, social, and political matters dealt with in the act. Whatever conclusion may be reached as the result of our deliberation, it in no way involves the determination by the court of the social value of the objectives sought. Under our constitutional system, in reviewing an act of the legislature, the duties of the court are limited to considering whether or not the act of the legislature contravenes the provisions of the constitution."

Also, in Gottlieb v. Milwaukee (1967), 33 Wis.2d 408, 415, 147 N.W.2d 633, 637, this court said:

'On the other hand, it is a legislative enactment that is attacked as being unconstitutional, and the cardinal rule of statutory construction is to preserve a statute and to find it constitutional if it is at all possible to do so. We have recently said:

". . . the duty of this court is . . . if possible, to so construe the statute as to find it in harmony with accepted constitutional principles.' State ex rel. Harvey v. Morgan (1966), 30 Wis.2d 1, 13, 139 N.W.2d 585, 590.

'All legislative acts are presumed constitutional, and every presumption must be indulged to sustain the law if at all possible. State ex rel. McCormack v. Foley (1962), 18 Wis.2d 274, 279, 118 N.W.2d 211; School Dist. No. 6 of City of Greenfield v. Marine Nat. Exchange Bank of Milwaukee (1960), 9 Wis.2d 400, 403, 101 N.W.2d 112. If any doubt exists it must be resolved in favor of the constitutionality of a statute. State ex rel. Thomson v. Giessel (1953), 265 Wis. 558, 564, 61 N.W.2d 903. We as a court are not concerned with the merits of the legislation under attack. We are not concerned with the wisdom of what the legislature has done. We are judicially concerned only when the statute clearly contravenes some constitutional provision. Chicago & N.W.R. Co. v. La Follette (1965), 27 Wis.2d 505, 521, 135 N.W.2d 269.'

Therefore, in order for this court to strike down an act of the legislature, it is necessary to find that it offends specific provisions of the state constitution which have limited and circumscribed legislative action.

Public Purpose.

No specific cause in the constitution establishes the public purpose doctrine. However, it is a well-established constitutional tenet. State ex rel. Singer v. Boos (1969), 44 Wis.2d 374, 171 N.W.2d 307; State ex rel. Warren v. Reuter (1969), 44 Wis.2d 201, 170 N.W.2d 790; State ex rel. La Follette v. Reuter (1967), 36 Wis.2d 96, 153 N.W.2d 49; State ex rel. Bowman v Barczak (1967), 34 Wis.2d 57, 148 N.W.2d 683. In State ex rel. Singer v. Boos, supra, 44 Wis.2d page 381, 171 N.W.2d page 311, this court stated:

'Although there is no specific constitutional clause so stating, the rule is firmly established that there can be no expenditure of public funds for a private purpose.'

Both parties on this appeal concede that public funds may be expended only for public purposes, and that the expenditure of such funds for a private purpose is unconstitutional.

What constitutes a public purpose is in the first instance a question for the legislature to determine. This court in State ex rel. La Follette v. Reuter, supra, 36 Wis.2d at pages 114 and 115, 153 N.W.2d at page 57, stated:

'The rule for determining the public purpose for expenditure of public funds is set forth in State ex rel. Thomson v. Giessel (1953), 265 Wis. 207, 215--216, 60 N.W.2d 763, 767:

"The general rule as to the public purpose of the expenditure of public funds is stated in 81 C.J.S. States § 133, page 1149, as follows:

"'Generally, in connection with the validity of the expenditure of state funds, what is . . . a public purpose, is a question for the legislature to decide, with respect to which it is vested with a large discretion, which cannot be controlled by the courts unless its action is clearly evasive. . . . Where a doubt exists whether the purpose of an appropriation is public or private, it will be resolved in favor of the validity of the appropriation, . . .''

'The Thomson case (1953), supra (265 Wis.), at p. 216, 60 N.W.2d (763) at p. 768 cited with approval, Carmichael v. Southern Coal & Coke Co. (1937), 301 U.S. 495, 57 S.Ct. 868, 81 L.Ed. 1245, which states:

"'. . . The existence of local conditions which, because of their nature and extent, are of concern to the public as a whole, the modes of advancing the public interest by correcting them or avoiding their consequences, are peculiarly within the knowledge of the legislature, and to it, and not to the courts, is committed the duty and responsibility of making choice of the possible methods. (Citations.) As with expenditures for the general welfare of the United States (Citations), whether the present expenditure serves a...