City of Lexington v. Thompson

Oiux-rox or the ooitkt uy

JUDGE DURELLiE

Reversing.

Ry the fourth section of an act amending the act for the government of cities of the second class, approved March 15, 100 (Acts 1900, p. 15), it was provided: “The said fire department shall consist of one chief, whoso salary shall not be less than one hundred and fifty dollars per month; the engineer’s salary shall be eighty dollars per month; the electrician’s salary shall be seventy dollars per month, and the ordinary fireman’s salary shall be sixty-five dollars per month.” The appellee, Thompson, brought suit against, the appellant,- ilie city of Lexington, a city of the second class, alleging that he was a resident of that city, and employed by it as an ordinary fireman, having been appointed by the board of police and fire commissioners; that prior to the passage of the act his salary as fireman was $50 per month, and by that act was increased to $65 per month; that he continued to serve as ordinary fireman up to July-22, 1901, when he resigned; that from time to time he made demand upon the city for the increase of salary provided for by the act at the rate of $15 per month, which was refused. His prayer was for judgment for the difference between the salary paid him and that fixed by the act during Iho period from March 15, 1900, to Jul.v 22, 1901, aggregating $243.75. . A demurrer to the petition was filed and overruled. The city stood by its demurrer, ■ and judgment was-rendered against it. The ground of the demurrer is that the act is violative of £he right of local self-government by the city in a matter over which the municipality has exclusive control in its- private or corporate capacity, and that the act is therefore void.

For appellee it is contended that,the act does not violate any provision of the Constitution of the State, and -there-, fore can not be declared void because it is, or is supposed, to be, in violation of the spirit which may be supposed to pervade that instrument. Mr. Cooley is quoted in support of this proposition: “It the courts are not at liberty to declare statutes void because of their apparent injustice or impolicy, neither can they do so because they appear to the minds of the judges to violate, fundamental principles of republican government, unless it shall be found that those principles are placed beyond legislative encroachment by the Constitution. The principles of republican government are not a set' of inflexible rules, vital and active in the constitution, though ■ unexpressed, . . . nor are courts at liberty to declare an act void because, in their opinion, it is opposed to a spirit supposed to pervade the Constitution, but not expressed in words.” Cooley, Const. Lim. (5th Ed.), pp. ,202-204. Numerous other authorities are cited in support of the doctrine thus laid down, and among them the opinion of Chief Justice Robertson in Griswold v. Hepburn, 2 Huv., 24, where, after discussing the difference between the federal Constitution as a grant of power and the State Constitution as a written limitation upon the powers of the legislative organ of the people, it, is said: “But the same reason being inapplicable -to state legislation of doubtful compatibility with a State Constitution, proper deference to the legislative department should preponderate in favor of the constitutionality of its acts, and requires the judicial department to reeognize them as laws, unless it shall be clearly satisfied that they are not. Whenever a jurist inquires whether a State statute is consistent with the State Constitution, he looks into that Constitution, not íor a grant, but only for some limitation of the powers inherent in the people’s legislative organ so far as not forbidden by their organic law.” These general principles may be freely conceded. It is also urged that, as said by the supreme court in U. S. v. Baltimore & O. R. Co., 17 Wall., 329, 21 L. Ed., 597, a municipal corporation is not only a representative of the State, “but is a portion o'f its governmental power. It is one of its creatures, made for a specific purpose, to exorcise within a limited sphere the powers of the State: The State may withdraw these local powers of government at pleasure, and may, through its Legislature or other appointed channels, govern the local territory as it governs the State at large. It may enlarge or contract its powers or destroy its existence.” These general statements of the legislative power over municipal affairs are always to be read in the light of the state of fact to which they are applied by the courts which give them utterance. Unless so read, they are apt, at times, to be misleading. In fact, the very authorities which thus state the general rule state also the limitations to be placed upon it. Speaking of the limitation upon legislative power, Judge' Cooley says: “It does not follow, however, that in every case the courts, before they can set aside the law as invalid, must be able to find in the Constitution some specific inhibition which has been disregarded, or some express command which has been disobeyed. Prohibitions are only important where they are in the nature of exceptions to the general grant or power; and, if the authority to do an act has not been granted by flu' sovereignty to its representatives, it can not be necessary to prohibit itk being done.” Const. Lim. (5th Ed.), p. 203. So, Yon Holst (Const. Law, 271), after stating the-general rule that the legislative power of the State Legislatures is unlimited so far as no limits are set to it by the federal or State Constituí ion, proceeds: “This does not mean, however, that these restrictions must always be expressed in explicit words. As it is generally admitted that the factors of the federal government have certain implied powers,” so it has never been disputed that the State Legislatures are subject to ‘implied restrictions” that is, restrictions which must be deduced from certain provisions of the federal or State Constitutions, or that arise from 1 lie* political nature of the Union, from the genius of American public institutions.” And in Mechem on Public Officers (section 123), it is said: “Indeed, this right of local self-government, as it has been briefly termed, is held to be an established feature and incident of our political system, and ii is not within tlu; power of the Legislature of a State to permanently fill by appointment ihe local offices established by law for purely local purposes.” See, also, Cincinnati, W. & Z. R. Co. v. Clinton Co. Com’rs, 1 Ohio St., 77. Said Mr. Edward Rates, in his argument in Hamilton v. St. Louis Co. Ct. (15 Mo., 13, cited with approval in Cooley, Const. Lim. [5th Ed.] p. 49), a Constitution is “not the beginning of a community, nor the origin of private rights. It is not the fountain of laws, nor the incipient state of government. It is not the cause, but consequence, of personal and politic»! freedom. It grants no rights to the people, but is the creature of their i>ower, the instrument of their convenience, designed for their protection in the enjoyment, of the rights and powers which they possessed before the Constitution was made. It is but the form and framework "of the political government, and. necessarily based 'upon the pre-existing condition of laws, rights, habits, and modes of thought. ... A written Constitution is, in every instance, a limitation upon the powers of. government in the hands of agents.” And Mr. Webster said: “Written constitutions sanctify and confirm great principles, but the latter are prior in existence to the former.” A municipality is a state* agency forgo'vernmental purposes. It exercises political governmental powers delegated by the State. As to such powers, and-as to the duties which attach to their exercise in the administration of justice and the preservation of the public peace, it is imperkm• in imperio-, a part of the governmental machinery of the Commonwealth. Therefore its charter and legislative acts regulating the use of State property held by it did not constitute contracts within the meaning, of the constitutional provision. Its political powers are not vested rights as against the State. As well said by Mr. Mc.Quillin in a recent article upon the subject (31 Am. Law Rev., p. 506): “It is thus manifest that in matters of public' concern, such as relate to the performance of functions by the city as the agent of the State, the Legislature-is not limited to conferring a discretionary power, but may exercise authority where the local officers or agencies neglect or refuse to discharge their public duty in providing for tlje public needs of the locality, or in voting or levying the proper taxes for public purposes. As to duties which the people in the several localities owe to the State* at large, they can not be allowed a discretionary authority to perform them or not, as they may choose, for such authority would be wholly inconsistent with anything like regular and uniform government of the State.”

The conceded legislative control over the exercise of these governmental functions has furnished the subject of numerous adjudications. What constitutional limitations, either express or implied, existed upon the exercise.of this legislative control .it is not necessary, nor is it our purpose, in this case to determine. But a municipal corporation is net merely a public agency of the* State. Its governmental functions are not all the functions which it possesses o> exercises. It is, in part, a corporation possessed of private ■franchises and rights, which it may exercise for its private, corporate advantage, for the benefit of the community, as distinct from the State government. It may hold and manage property, not for the benefit of the State, but to supply local needs and conveniences; and in respect thereto it acts as a private corporation, and in that capacity may sue and be sued. '“With respect to its private or proprietary rights and interests,” it is entitled to the protection of the Constitution, like other corporations. City of New Orleans v. New Orleans Water Works Co., 142 U. S., 79, 12 Sup. Ct., 142, 35 L. Ed., 943. Assuming that as to the governmental functions of a municipality the. contention of appellee is 1 rue to its broadest extent, and that what the Legislature gives to the municipality by its act of incorporation it may alter or destroy at pleasure, it does not at all follow that the rights and privileges of the local community, which become vested in the corporate entity created by the Legislature for the benefit of the community, are likewise subject to the legislative control. The Legislature can not take away from the community rights or property which existed or were acquired without the aid of legislation. A municipality has a dual character. In its character as a State agency it exercises governmental, political, public and administrative powers and duties. In its capacity as a private corporation it exc-rc-ises rights and powers inherent in the people of the community, which have never been surrendered to any department of the government, and which are property rights within the protection of the -Constitution. Among the earliest, courts to recognize this dual capacity of municipalities are those of Kentucky. < The question arose upon a claim by the city of Louisville to exemption from State taxation. In that case (City of Louisville v. Com., 1 Duv., 297, 85 Am. Dec., 624) this court, through Judge Robertson, said: “But a municipal corporation, like a State, a county, or the city of Louisville, is much more than a person. While nominally a person, it is vitally a political power; and each, in its prescribed sphere, is ‘bn peri um in imperio.’ All are constituent elements of one total sovereignty. The city of Louisville, to the extent of the jurisdiction delegated to it by its charter, is but an effluence from the sovereignty of Kentucky, governs for Kentucky, and its authorized legislation and local administration of law are legislation and administration by Kentucky through the agency of that municipality. The tax law of Kentucky constructively applies to persons only, and not at all to political bodies exercising in different degrees the sovereignty of the State. . ■ . . And if, notwithstanding the specified exceptions, the public property of the State and counties is exempt, the same reason exempts the public property of Louisville used for carrying on its municipal government. But, so far as any of its property may be used, not for that purpose, but only for the convenience or profit of its citizens individually or collectively, this it owms and uses as a private corporation, and, like the property of all such corporations not expressly exempted, it is a legal subject of assessment for taxation. The more precise and distinctive test for classification is this: Whatever property, such as court house, prison, and the like, which became necessary or useful to the administration of the municipal government, and is devoted to that use, is exempt from State taxation, but whatever is not so used, but is owned and used by Louisville in its social or commercial capacity as a private corporation, and for its own profit, such as vácant lots, market houses, fire engines, and the like, is subject to taxation.” Mr. Dillon thus states the distinction: “The■ administration of justice, the preservation of public peace, and the like, although confided to local agencies, áre essential matters of public concern; while the enforcement of municipal bylaws proper, the establishment of gas works- and water works, the construction of sewers, and the like, are1 matters which pertain to the municipality as distinguished from the State at large.” Mun. Oorp., section 58. The Massachusetts court, recognizing the water works, markets, hospitals, cemeteries, libraries, and the system of parks of Boston as established “for the benefit of the public,” declares them to be “held more like the property of a private corporation,” and therefore protected from legislative interference. Mt. Hope Cemetery v. City of Boston, 158 Mass., 519, 33 N. E., 695, 35 Am. St. Rep., 515. And again, in Dillon on Municipal Corporations (section 12a), it is said: “In many of its more important aspects, a modern American city is not so much a miniature State as it is a business corporation, its business being to wisely administer the local affairs and economically expend the revenue of an incorporated community. As we learn this lesson, and apply business methods- to the scheme of municipal government and the conduct of municipal affairs, we are on the right road to better and more satisfactory results.” In Nebraska the Legislature passed an act establishing a board of police and fire commissioners, to' be appointed by the Governor, to whom there was given all powers and duties connected with the appointment, removal, and discipline of the members of the police and fire departments. It was there held (State v. Moores, 76 N. W., 175, 41 L. R. A., 624, overruling a former decision) that the act was void. Said the court: “It is true that the State Constitution is not a grant of legislative power, and the lawmaking body may legislate upon any subject not inhibited by the fundamental law; but it by no means follows from this that the Legislature is free to pass laws upon any subject unless in express terms prohibited by the Constitution. The inhibition on the power of the Legislature may be by implication as well as by expression. Laws may be and iavf been declared invalid, although not repugnant to any express restriction contained in the fundametal lav/.” To the same effect, see Rathbone v. Wirth, 150 N. Y., 459, 45 N. E., 15, 34 L. R. A., 408. The same conclusion was reached as to a similar law of Indiana in the cases of State v. Denny (Sup.) 21 N. E., 252, 4 L. R. A., 79; City of Evansville v. State, Id., 267, 4 L. R. A., 93; and State v. Fenny, Id., 274, 4 L. R. A., 65. In the case first "named, the court said: “The construction of sewers in a city, the supplying of gas, water and fire protection, and many other matters that might be mentioned, are matters in which the local communities alone are concerned, and in which the State has no special interest; and they are matters over which the people affected thereby have exclusive .control, and it can not, in our opinion, be taken away from them by the Legislature.” In Western Sav. Fund Soc. v. City of Philadelphia, 31 Pa., 183, 72 Am. Dec., 730, Chief Justice Lewis, delivering the opinion of the court, said: “The supply of gas light is no more a duly of sovereignty than the supply of water. Both these objects may be accomplished through the agency of individuals or private corporations, and -in very many instancesi theyare' accomplished by these means. If this power is granted to a borough or a city, it is a special private franchise, made as well for the private emolument and advantage of the city as for the public good. The whole investment is the private property of the city, as much so as the lands and houses belonging to it. Blending the two powers in one grant does not destroy the clear and well-settled distinction, and the process of separation is not rendered impossible by the confusion. In separating them regard must be had to the object of- the Legislature in conferring them.' If granted for public purposes exclusively, they belong to the corporate body in its public, political or municipal character. But if the grant was for purposes of private advantage and emolument, though the public may derive a common benefit therefrom, the corporation quoad hoc is to be regarded as a private company. It stands on the same footing as would any individual or body of persons upon whom the like special franchises have been conferred.” ■

The distinction between the two capacities in which a municipality may act is nowhere better stated than in the two great opinions of Judge Cooley in People v. Hurlbut, 24 Mich., 44, 9 Am. Rep., 103, and People v. Common Council of Detroit, 28 Mich., 228, 15 Am. Rep., 202. In the former case the question was as to the1 power of the Legislature to appoint permanent officers for the full term, whose duties were purely municipal, and arose over an act which created and appointed a board of public works. In the opinion by Judge Cooley, it was said: “In the case before us, the officers in question involve the custody, care, management and control of the pavements, sewers, waterworks, and public buildings of the city, and the duties are purely local. The State at large may have an indirect interest in an intelligent, honest, upright and prompt discharge of them, but this is on commercial and neighborhood grounds, rather than political, and it is not much greater or more direct than if the State line excluded the city. Conceding to the State the authority to shape the municipal organizations at its will, it would not follow that a similar power of control might be exercised by the State as regards the property which the corporation has acquired, or the rights in the nature of property which have been conferred upon it. There are cases which assert such power, but they are opposed to what seem to be the best authorities, as well as the soundest reason. The municipality, as an agent of government, is one thing; the corporation, as an owner of property, is in some particulars to be regarded in a very different light. . . . Constitutional freedom certainly does not consist in exemption from governmental interference in the citizen’s private- affairs; in his being unmolested in his family; suffered to buy, sell, and enjoy property, and, generally, to seek happiness in his own way. All this might be permitted by the most arbitrary ruler, even though he allowed his subjects no degree of political liberty. The government of an oligarchy may he as just as regardful of private rights and as little burdensome as any other; but if it were sought to establish such a government over our cities by law, it would hardly do to call upon a protesting people to show where, in the Constitution, the power to establish it was prohibited. It would be necessary, on the other hand, to point out to them where and by what unguarded words the power had been conferred. Some things are too plain to be written. . . . The State may mold local institutions according to its views of policy or expediency; but local government is a matter of absolute right, and the State can not take it away. It would be the boldest mockery to speak of a city as possessing municipal liberty where the State not only shaped its government, but, at discretion, sent in its own agents to administer it; or to call that system one of constitutional freedom under which it should be equally admissible to allow the people full control in their local affairs or no^ control at all.” In' the latter case of People v. Common Council of Detroit, the question was more nearly similar to that presented in the case at bar. It was the question of the legislative power to compel local improvements, -which is practically the same question as here presented, viz., the legislative power to compel expenditure for a local purpose. The question, as stated in the opinion, was whether there rested upon the judiciary the duty, “by the compulsory process of this court, to coerce the city of Detroit into entering in contracts involving a debt for a very large sum for an object of purely local concern,, which the legislative body of the city has refused to make.”' Said the court, through Judge Cooley: “In People v. Hurlbut, 24 Mich., 44, 9 Am. Rep., 103, we considered at some length the proposition which asserts the amplitude of legislative control over municipal corporations, and we there conceded that, when confined, as it should be, to such corporations as agencies of the State in its government, the proposition is entirely sound. In all matters of general concern there is no local right to act independently of the State; and the local authorities can not be permitted to determine for themselves -whether they will contribute through taxation to the support of the State government, or assist, when called upon, to suppress insurrections, or aid in the enforcement of the police laws. Upon all such subjects the State may exorcise compulsory authority, and may enforce the performance of local duties, either by employing local officers for that purpose or through agents or officers of its own appointment. . . . But we also endeavored to show in People v. Hurlbut that, though municipal authorities are made use of in State government, and as such are under complete State control, they are not created exclusively for that purpose, but have other, objects and purposes peculiarly local, and in which the Stale at large', except in conferring the power and regulating its exercise, is legally no more concerned than it is in the individual and private concerns of its several citizens. Indeed, it would be easy to show that it is not from the standpoint of State interest, but from that of local interest, that the necessity of incorporating .cities and villages most distinctly appears. State duties of a local nature can, for the most part, be very well performed through the employment of the usual township and county organizations; so that if the State alone, in its corporate capacity, were to be regarded, the conferring of special corporate powers on cities and villages might very well be dispensed with. . . . The twofold character of these corporations, as organizations on the one hand for State purposes, and on the othdr hand for the benefit of the individual corporators, has invariably been recognized by this court wherever there has been occasion to refer to it. We also referred, in People v. Hurlbut, to several decisions in the federal supreme court and elsewhere to show that municipal corporations, considered as communities endowed with peculiar functions for the benefit of their own citizens, have always been recognized as possessing powers and capacities and as being entitled to exemptions distinct from those which they possess or can claim as conveniences in State government. If the authorities are examined, it wili be found 1hat these powers and capacities, and the interests which are acquired under them, are usually spoken of as private, in contradistinction to those in which; the State is concerned, and which are called ‘public/ thus putting these corporations, as regards all such powers, capacities, and interests, substantially on the footing of private corporations. . . . But it can not be contended that authority in the Legislature to determine what shall be the extent of capacity in a city to acquire and hold property is equivalent to or contains within itself the authority to deprive the city of .property actually acquired by legislative permission. As to the property it thus holds for its own private purposes, a city is to be regarded as a constituent 'in State government, and is entitled to the like protection in its property rights as any natural person who is also a constituent. The right of the State, as regards such property, is a right of regulation, and, though broader than exists in the case of individuals, is not a right of appropriation. The constitutional principle that no person shall be deprived of property without due process of law applies to artificial persons as well as natural, and to municipal corporations in their private capacity, as well as to corporations for manufacturing and commercial purposes. And when a local convenience or need is to be supplied in which the people of the State at large or any portion thereof outside the city limits, are not concerned, the State can no more, by process of taxation, take from the individual citizens the money to purchase it, than they could, if it had been procured, appropriate it to State use. To this extent the corporate right appears to us to be a clear and undoubted exception to the general power of control which is vested in the State.”

It may be admitted that the line which distinguishes those matters ^ith respect to which cities, as State agencies, exercise governmental functions from those as to which it acts in \its private, corporate capacity, representing the people of the community, is not always well-defined. Tt may well be thát, in cases in which it is difficult to ascertain to which class a right, a power, or a function should be assigned, the courts would hesitate to annul an attempted exercise of legislative power. But in cases in which the proper classification can be ascertained the courts should not, and do not, hesitate to act. Fpon a question of this kind it is to be expected that under the varying provisions of various State Constitutions, and with the different pro'codures and customs which obtained in the various States at and before the date of the adoption of those Constitutions, there should be conflict in the authorities. For example, in some of the cases we have cited the systems devised for police and fire protection seem to have both been regarded as purely municipal and local, and therefore exempt from legislative interference. The better opinion as to police systems seems to be that inasmuch as the State is charged primarily with the preservation of public peace and the protection of life and property in the cities as -well as in the rural districts, the city police is, in large measure at. least, a part of the State constabulary, and its members perform ttie functions of State officials in the exercise of delegated State sovereignty. Therefore, in so far as the police systems of our cities form a part of the State government. they are subject to legislative control. And this control has been distinctly recognized by this court in Neumeyer v. Krakel (110 Ky., 624) (23 R., 190) (62 S. W., 518). But between the police systems of municipalities and the fire departments there seems to be a manifest dis-Unction, though many of the courts — as in Indiana, Nebraska and California — hare recognized the officers of both departments as purely municipal and local. The act in question does not undertake to deprive the local authorities of the power of appointment or seledion of the fire commissioners, but only to regulate and fix the salaries of the officers aud employes. It .seems conceded that the establishment of fire , departments by municipalities is a voluntary act of self-protection; that the municipality, on grounds of public policy, is not responsible for negligence of its fire department; and that the property of the fire department is held by the municipalities in their capacity of private corporalions. . We do not undertake to say that the State is devoid of power to take measures for the protection of the property of its citizens from fire. The question before us is whether the rate of payment of the employes of such a system, devised for the benefit of the local community, of no special interest or advantage to the State, except in so far as it is advantageous and beneficial to the community, is municipal or governmental in its nature. If the rate of pay to be fixed for such employes is governmental, then, also, is the variety of fire engines to be used, the size and breed of the horses which pull them, the number of fire plugs or cisterns to be established, and the personnel of the force. If the Legislature can arbitrarily fix the rate of payment for such services at $65 per month, it can fix it at any other sum which it deems reasonable; and if fixing the pay of firemen is a governmental function because firemen render service in the preservation of the property of citizens of the Commonwealth, then it is also a governmental function to fix absolutely the per diem of the street sweepers -and the monthly wages- of the janitors in the city hall. We do not think such legislative interference in a matter in which no one but they firemen and the taxpayers of the city can possibly be inter-^ ested could have been in contemplation of the framers ofj our Constitution, or of the voters who sanctioned its adoption. If such, a power is governmental, it is governmental' also to fix the wages of every employe of every city, of whatever class. There were cities and' towns before the Constitution wras adopted. At the date of its adoption they were managing their own little local affairs. They were employing and paying the members of their fire departments, as in times gone by they had managed their own volunteer fire departments. The makers of the organic law — the voters whoso ballots operated to enact it— voted for it with these facts before them, and they limited the time which might be devoted to legislation to GO days-in each 2 years. Is it conceivable that they expected or intended to permit the Legislature to take charge of the petty salaries of every hamlet in the State? As said by Judge Olds in State v. Denny (Ind. Sup.), 21 N. E., 282, 4 L. R. A., Co: “It is fair to presume that the people of the State, in the adoption of the Constitution, did not intend to surrender the right of local self-government in so far as to allow the Legislature to take charge of the fire department of every town and city of the State, and to appoint officers to take charge of and manage the affairs of such department, and limit the legislative body to 60 days every 2 years. We do not believe that such was the intention of the people at the time, nor do we believe that such is the extent of the power at the present, time; nor is there any ' word or sentence in the Constitution granting such power/' As said by Judge Cooley, “Some things are too plain to be written. The State has no interest in the property within a city or town, except such indirect interest as it-has in tlie property of all its citizens. Since the organization of the State government, towns and cities have universally exercised the exclusive right of self-government in the control and repair of streets, alleys, and sidewalks, in the construction of sewers and waterwoi'ks, and the organization and control of Are departments. They have been held liable1 for damages resulting by reason of defects in sidewalks, s! rents and sewers. All property within its corporate limbs is liable for the payment of debts created by the municipality in providing these necessities to the municipality, and in which the people other than those residing within the particular town or city are in no way directly interested.” We do not think the Legislature can fix the salaries of firemen, any more than it can fix the pay of street sweepers, the drivers of ash carts, or fix the price per square yard which the citizen shall pay for an improvement of the public ways.

The doctrines stated in McDonald v. City of Louisville (recently decided) 113 Ky., 425) (24 R.,271) (68 S. W., 413) arc in full accord with the views here expressed.

For the reasons given, the judgment is reversed, and cause remanded, with directions to sustain the demurrer to the petition, and for further proceedings consistent herewith.

Whole court sitting.

Case Details

Case Name: City of Lexington v. Thompson

Court Name: Court of Appeals of Kentucky

Date Published: May 28, 1902

Citation: 113 Ky. 540

Court Abbreviation: Ky. Ct. App.