State ex rel. Parker v. Kansas City

• Decision Date: 27 January 1940
• Docket Number: 34743.
• Citation: 151 Kan. 2,98 P.2d 101
• Parties: STATE ex rel. PARKER, Atty. Gen., v. KANSAS CITY et al.
• Court: Kansas Supreme Court

98 P.2d 101

151 Kan. 2

STATE ex rel. PARKER, Atty. Gen., v. KANSAS CITY et al.

No. 34743.

Supreme Court of Kansas

January 27, 1940

Syllabus by the Court.

City's resolution reciting that to obtain necessary tenants for city's recently constructed wholesale terminal fruit and vegetable market, it was necessary, in making leases with certain prospective tenants, that city expend certain sums in cash out of its gross terminal market income and allow certain credits on rentals to such tenants, was a valid exercise by city of the powers granted to it by statute dealing with the subject. Gen.St.1935, 12-1301 et seq 13-402, 13-1060 et seq., 13-1239 to 13-1243; Gen.St.Supp 1937, 13-1238, 13-1244.

Where a statute has authorized and empowered a city government to construct and improve the facilities of its public levee and to establish thereon a wholesale fruit and vegetable market and authorized a bond issue of $3,000,000 to pay for such improvements, which bond issue and the interest thereon, and all the necessary, pertinent and incidental expenses of the market and its related facilities are to be paid for exclusively out of the rental income to be derived therefrom (and not out of the city's general reveniles nor by levies or assessments on the taxpaying public), and where the governing body of the city is confronted with the problem of finding tenants for large rental space units in the market without the occupancy of which the market cannot be successfully established as a going concern, a resolution of the city to expend a portion of the terminal market's rental income and to offer abatements of rents to procure desirable prospective tenants does not transcend the express or implied limits of authority conferred on the city government, so as to warrant judicial interference therewith.

Supplementing opinion.

HARVEY, J., dissenting.

For former supplemented opinion; see 97 P.2d 104.

Jay S. Parker, Arty. Gen., and A. B. Mitchell, Asst. Atty. Gen., for plaintiff.

Alton H. Skinner, City Atty., Joseph A. Lynch, Deputy City Atty., Blake A. Williamson, and Donald H. Corson, all of Kansas City, for defendants.

DAWSON Chief Justice.

The state on the relation of the attorney general and the city of Kansas City revoke our original jurisdiction in quo warranto to determine the legality of certain arrangements which the city and its governing officials propose to make with prospective tenants of the newly completed food terminal market. More precisely put, the city wants an authoritative decision on the question whether it may expend some portion of the rental income of the market to aid a number of wholesale commission merchants who must sustain certain extraordinary expenses and depreciation losses in order to enter into leasing contracts for large space units in the market.

The pleadings allege that the construction of the Kansas City Food Terminal Market is the culmination of years of effort on the part of the city to improve and put to use a tract of land donated in pre-statehood times to the town of Wyandotte, now Kansas City, for a public wharf on the west bank of the Missouri River and north of its confluence with the Kaw. Preceding chapters in the progress of this civic undertaking are recorded in our reports. Kansas City v. Board of County Com'rs of Wyandotte County, 117 Kan. 141, 230 P. 79; State ex rel. Boynton v. Kansas City, 140 Kan. 471, 37 P.2d 18; Robertson v. Kansas City, 143 Kan. 726, 56 P.2d 1032; State ex rel. Beck v. Kansas City, 149 Kan. 252, 86 P.2d 476. Other cases incidentally involving the wharf property and its accretions were Stark v. Meriwether, 98 Kan. 10, 157 P. 438, Ann.Cas.1918E, 993; Id., 99 Kan. 650, 163 P. 152; State of Kansas v. Meriwether, 8 Cir., 171 F. 39; State of Missouri v. State of Kansas, 213 U.S. 78, 29 S.Ct. 417, 53 L.Ed. 706.

The present action has arisen out of the passage of a resolution by the city government of Kansas City which reads:

"Resolution No. 11275

"Whereas, the Board of City Commissioners of the City of Kansas City, Kansas, by Ordinance No. 30304, passed on the 6th day of December, 1938, approved by the Mayor on December 6, 1938, and published in the official paper of Kansas City, Kansas, on December 8, 1938, adopted a uniform lease form for the leasing of wholesale units in the Kansas City Food Terminal, which said form provided, among other things, for a rental of Fifty Dollars ($50.00) per month per unit for the first three months, and One Hundred Fifty Dollars ($150.00) per month per unit for each additional month thereafter; and

"Whereas, in connection with negotiations with prospective lessees for use of space in the new Kansas City Food Terminal, the City has found that certain costs would be incurred by some prospective tenants, due to rental obligations on present places of business and costs due to abandonment of equipment and facilities now located in, and the good will of said established place of business, and said prospective tenants, as a condition precedent to the acceptance of said leases, have asked the City to absorb a part of said costs; and

"Whereas, the City, after consideration, have found that in the initiation of the Kansas City Food Terminal Project desirable tenants have engagements and existing facilities that must be taken into consideration in securing the cooperation of such persons and the occupation by them of the facilities in the new Terminal, and that it is the prudent and necessary thing to do in initiating the project and to secure the full cooperation of the dealer tenants necessary to obtain the fullest possible occupancy of the facilities;

"Now Therefore, Be It Resolved ***

"That the City of Kansas City, Kansas, proceed promptly to negotiate with each prospective lessee to determine upon the character and amount of such costs to be established by sworn statements of said prospective tenants and upon agreement with respect thereto to enter into leases with them for facilities in the Kansas City Food Terminal on such terms and conditions as to cash payments to said tenants or credits on future rentals, or both, as the Board of City Commissioners of the City of Kansas City, Kansas, may determine to be necessary and proper expenses in connection with the establishment and operation of said Kansas City Food Terminal.

"Be It Further Resolved:

"That said Board of City Commissioners hereby request the Attorney General of the State of Kansas to forthwith proceed in the nature of a quo warranto in the name of the State and against the City and its

governing body to determine whether or not the City and its Commissioners, in its proprietary capacity, have authority to pay such sums as are necessary in the discretion and sound judgment of the Board of City Commissioners to carry out, in the discretion of said Board, such policies and transactions as may be to the best interest of said City in securing tenants for said Kansas City Food Terminal.

"Said Attorney General is also requested to raise any and all other questions as he shall deem just and proper in the premises. "Adopted by the Board of Commissioners This 16 Day of December, 1939"

Accordingly the attorney general's petition alleges at length all the pertinent facts, --the dedication of certain riparian lands at the junction of the Missouri and Kaw rivers for a public wharf, its improvement by the city, the construction of levees to protect it from floods, the construction of a grain elevator terminal dock and wharf, the construction of a mooring wharf, and the construction of a wholesale terminal fruit and vegetable market, and other improvements,--the cost of which have been met by an issue of $3,000,000 revenue bonds and by a generous grant of funds from the federal government. Within the last few years the total expenditure of government funds and borrowed money on these improvements approximate $6,000,000.

The state alleges that the defendants are without authority to do what is now proposed in the resolution set out above,--that no part of the rental income already collected can be thus expended, nor can abatemerits of prospective rents or credits thereon be extended to prospective tenants as an aid or inducement for them to become lessees of units of the market.

Attached to plaintiff's petition are copies of city ordinances under which bonds to the amount of $3,000,000 have been issued payable out of the anticipated rental income of the city's public levee and this new food terminal market. These bonds contain lengthy recitals as to the purposes of their issue, and also recite that--

"This bond and the interest hereon are payable solely from the money and revenue received by said City from the fees charged and rental received for the use of the property and facilities improved, constructed, reconstructed, repaired or otherwise improved by the proceeds, in whole or in part, of the revenue bonds of said City, issued or to be issues as aforesaid, and not from any other fund or source. This bond shall not be or constitute a general obligation of said City of Kansas City, Kansas."

Defendants' answer raises no issue of fact but only pertinent issues of law. Defendants assert that they have lawful authority to do what is reasonable and necessary to insure the success of the market; that they are immediately confronted with an administrative problem of first importance which is that of procuring responsible tenants to lease and occupy some thirteen of the largest rental units in the market; that without such tenancies and the rental income to be derived therefrom the financial objective of providing for the payment of the bonded debt incurred in constructing the market and its related facilities, as contemplated by the statute and by the...