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Uhls v. State Ex Rel. City of Cheyenne
429 P.2d 74
Wyo.
1967
Check Treatment

*1 Í.74 ; was-ample While there uncontradicted evi- UHLS, Clerk, City Edna V. Cheyenne, showing, dence numerous benefits to the Appellant (Defendant below), community by the project,

(cid:127)'plant privately was prior financed to the Wyoming STATE of ex rel. CITY OF CHEY ..time- pertinent introduction of the ENNE, Appellee (Plaintiff below). beginning suit, of this .ordinance No. 3589. justify rand order to the issuance of the ¡questioned bonds, it necessary would Supreme Wyoming. Court of public show that a purpose would be served June '.by the issuance of the bonds which would accomplished not be private financ-

ing. Our review of the record discloses

insufficient accomplish evidence this. .to Wycon President company * *’ * asked,

was “Is it not true that the

'same number employed of men will be plant,

operating quantities the same gas used,

'natural will be and the same

benefits will people accrue to the Cheyenne area and the State of ’

generally regardless plant 'of whether the through private financed sources or

'through the municipal issuance these answered,

revenue bonds?” This' official necessarily,” and then went on to ex-

/‘Not plain plant if the was financed with costs would be lowered company .compete able to more ef-

fectively products in its and that benefits accrue to public plant operate

area was able to at when capacity. At full best we think this evi- speculative,

dence both indefinite and supporting finding of the court that production resulting lower costs

the issuance of the industrial Wycon

revenue bonds would enable to ex-

pand products, the market for its result-

ing employment in increased and increased gas. However,

use of natural: notice appeal challenge findings did not fact, ques-

.of which in event were not argument

tioned in brief or appellants’ be considered in attack

now

upon being the court’s conclusions of law as provision

violative re-

lating municipal corpo- restriction acting pursuance

rations other than in We, therefore, purpose.

law for opinion.

concur the result reached

OX *3 Godfrey, Paul B. Miller, Thomas O. Crowley, Cheyenne, Ellen appellant. machinery, etc., buildings, then Wunnicke, appel- owned Cheyenne, for Brooke being' operated refining company, lee. project; proceeds suitable McINTYRE, PARK- GRAY, Before deposited the bond would be sale SPANGLER, ER, JJ., and D. J. trustee, who would disburse proceeds directed delivered McINTYRE Mr. Justice provisions of indenture and lease opinion of the court. agreement; acquisition total the valid- determine is an action to This $23,189,495,plus figure an amount financing of proposed Cheyenne’s ity of expenses defray sufficient all in con- Project Refining $25,000,000 Frontier authorization, nection with sale in- constitutionality of act for *4 $18,- of the issuance the sum of 8, ch. projects, dustrial art. 689,495, being paid the amount to be .the (§§ 15.1-92— Wyoming 1965 S.L. of refining initially $4,500,000 company and 1965). To 15.1-100, W.S.1957, Compiled expended ex- for modernization and determination, the on the state secure such pansion project, of the re- essential to the brought Cheyenne City of of relation the finery’s operation; the continued that the action in district a mandamus expansion modernization and of re- the compel city clerk, seeking the finery hiring will result in the of additional Agree- the Asset Purchase execution of employees; and that Frontier is the Re- Frontier acquisition ment for Cheyenne; refinery City oil of the Project. doing, plaintiff fining In so City project the would owner of be the validity sought a of and consti- declaration operation manufacturing suitable for as a act; tutionality (a) the mentioned as to: the project or industrial and lease it to ordinances, seeking un- Cheyenne the (b) Company; pur- Refining Frontier Re- der the act authorize Frontier the agreement realty, per- chase covered certain fining Project by revenue and to finance it property, sonal and leaseholds held now sale; purchase agreement, (c) bond the refinery company; the the lease lease, mortgage; (d) the viola- agreement company pay was to rental 6,5, tion of and art. art. §§ payments all revenues sufficient to cover financing. Wyoming Constitution, by the principal of and on the interest revenue specifically denied Defendant’s answer bonds, costs, fees, expenses, premi- all and validity constitutionality laws and issuance, incident to ums administra- and under which consumma- instruments prior redemption payment and tion of tion of and undertaken bonds, special the revenue and all taxes, defenses, including raised other additional assessments, insurance, repairs, utilities challenges. constitutional proj- maintenance and ground rents of the ect; There was actual trial but after cer- mortgage and that the indenture stipulations interrogatories and had' tain provided and deed of trust estab- deposition taken, the been entered and a separate lishment of four accounts with court, apparently pro acting forma, account, trustee, entered acquisition special fact, findings reciting generally Project principal the Frontier bond and City passed by that under an ordinance fund, Project interest Frontier adminis- proposed to issue revenue bonds for fund, fund maintenance and tration and purpose Refining acquiring the Frontier might additional be series of bonds Project promote (which eco- would prescribed earnings issued limitaT Cheyenne increasing nomic welfare of tions. activity, employment, stimulating industrial stipulations, and revenues, pleadings, augmenting sources of tax fos- From various findings fact, the court made tering stability, improving economic land, summary law, City’s conclusions which economy), the balance in the holding been a property to "have that all Wyo. said contravene Art. 12§ steps Cheyenne, Const., exempts taken property Company proposes (who Boettcher and' ?” taxation ' bonds), underwrite the and the Frontier appealed portion The defendant from that Refining Company in consummation of findings of fact held the .which proposéd financing project, been had proposed project promote proper, subject legal and to five constitu- economic welfare of and its questions which tional were reserved residents and from the mentioned conclu- sent to this court for answer: sions of law. Chapter “1. Do the Question No. Wyoming, 8 of 196S Art. ch. S.L. plaintiff’s Ordinances Nos. 1535 companion, Since neither this case nor its 1538,including Agree- the Asset Purchase Reed v. Cheyenne, Wyo., ' ment, Agreement, Lease and Indenture 69, can completely fully disposed of Mortgage au- Deed Trust questions without resort thorized Ordinance No. contain presented, immediately we turn to them. In ' delegations power contravention doing impressed signifi- so we are with the 3, 37, Wyo.Const. ? Art. and Art. Question 3, dealing cance of *5 suggested 16, 6, Wyoming- violation of art. § Is, “2. industrial revenue bond Constitution, provides which that “Neither Chapter 1, financing by Art. authorized- any county, city, township, state nor 112, Wyoming, 8 of 1965 S.L. ch. town, district, any political school or by plaintiff’s Nos. 1535 and Ordinances sub-division, shall loan credit public purpose by for required a any or make in donations to aid of in- 13, 3, Wyo.Const.? Art. § dividual, corporation”.1 association or n Does “3. the industrial revenue bond by The concept government should. financing by Chapter 1, authorized Art. 8 private development assist industrial 112, Wyoming, of ch. S.L. of 1965and new, having means in once flourished plaintiff’s 1535 and 1538 Ordinances Nos. the railroad bond era of the nineteenth lending public constitute the credit for century and been later revived with the private purpose in contravention Art. Mississippi Agriculture “Balance In- 6, 16, Wyo.Const. ? dustry” plan 1936, from which time “4. Does the industrial revenue bond spread throughout country idea has until financing by Chapter 1, authorized Art. in 1965 some form or other of been it has of ch. of Wyoming, S.L. 1965and adopted twenty-three in states.2 The Mis- plaintiff’s Ordinances Nos. 1535 and 1538 sissippi development Act declared the contravene the debt limitations public provided policy, (1) a matter of for prescribed by 5, Wyo. Art. 4 and policy commission to effectuate such ?” Const. investigation (2) and action and for a vote “5. Does the industrial revenue bond people community be af- financing by Chapter 1, Winona, authorized Art. fected. In Albritton v. ch. Wyoming, S.L. 1965and 181 Miss. 178 So. 115 A.L.R. plaintiff’s appeal Ordinances Nos. dismissed 303 U.S. S.Ct. by providing for taxation of 82 L.Ed. has been since case which Although any individual, the submitted or in asks of credit- “to aid of financing lending corporation.” if the constitutes “the association or public private purpose” credit for section', background contravention no direct 2. Informative are discussions is, 25; . reference made in the constitutional found in L. 19 Vand.L.Rev. 18 Maine provision “private purpose,” 25; 265; and we Rev. 1 and 111 U. of P.L.Rev. quéstioá' take the to relate to the loan 15 U.Ma.L.Rév. 264. ida, although approval, has not by criticism and enact- both spotlighted authorizing develop- legislation ed a statute industrial constitu- court held the bonds, legisla- tional, right ment a number of communities have emphasizing especially sought accomplish financing purpose, not unlike ture to declare a effectuating espoused here provided means for has con- when sistently rejected any plan where distinguishing the such as uncon- situation others, ground, prop- among stitutional on the had control of the owned and lease. erty prohibition there was a violate one wherein credit, lending g., propriety legality, including consti- e. Fla., Miami, North tutionality, specific scheme does Town of 59 So.2d 779. of a easy “yes or no” answer. itself to lend coming the states to our Of attention inevitable This is true because first legislation wherein there has been some au- background variance in constitutional thorizing type more or less the usual difference of each state and here, sought eight we find states in which develop- proposed plan either are so dissimilar adopted to which is ment or statute as not to ours to merit Dela- discussion: incongrui- result of the effectuate it. As a ware, Kansas, Dakota, Maryland, North ties, many analogies ex- there true Dakota, Tennessee, Vermont, South tant, necessary although collation is state, Virginia. Georgia, pro- West In one case such as consideration local visions of constitutional amendments us, the one now it is than before less applied arising have been in that matters many satisfactory in- clusive or even jurisdiction, which differentiate them from Historically, validity bond stances. states, the matter here. constitu- four arrangements *6 passed tional amendments have been which projects has also in the different varied any possible challenge should remove of a jurisdictions because of fundamental dis- permitting statute’s industrial similar, concepts per- judicial basic projects by municipalities. They are: cases; the certain sonnel who consider Arkansas, Missouri, Maine, and Nebraska. judges interpret controlling constitutional seems occasion to discuss There provisions strictly literally others or while except a these Nebraska where statute al- indulge sophistic are more liberal or in Wyoming’s passed most identical was reasoning, appearing influenced some and found to be the su- unconstitutional by pragmatic considerations. Illustration preme subsequent where a n ambiguous the re- often or ambivalent excepted stitutional amendment apparent sults will from our examination lending-of-credit revenue from the n cases, which dealt di- have more or less restriction. Further allusion later be rectly elementary question with the Is here: the made Nebraska situation. type project of this violative provisions providing constitutional (cid:127)of Although pro- constitution Oklahoma a shall not loan or its credit or municipalities credit, loaning hibits from it make cor- permits any occupa- donations to or in aid of engage the state in poration public purposes. ? business In tion or Okl., Claybrook, Harrison Although directly point, corollary in not a 605, industrial had is- revenue bonds been problem arose in where a au Ohio statute Authority, sued means of an for which thorizing agency an issue state to provisions were made Local in their Indus- proceeds revenue bonds with the to be loan Development court, Act; trial not- ed to located in the industries state was ing Authority general was lending held unconstitutional as governmental category agency pub- of a or Brand, state’s credit. ex rel. Saxbe v. powers, corporation, lic with limited function, purpose conducting 176 Ohio St. N.E.2d In Flor- held a state prom- much which had in them seductive provisions did applicable constitutional public good. enterprises ise of These Authority or its instru- trust render canals, railways, powers, included water ment invalid. corporate body The etc. each case Mississippi, states, In Illinois two debtor; primary state became present their statutes. find no cases on underwriter; al- loaned its credit have a states, Five ways with the assurance belief that municipality’s lend- provision proscribing a primary pay. debtor would Pursuant credit, ing as not uncon- determined have secondary liabilities, to these be- the state statutory provision more stitutional a came overwhelmed with dol- millions of Wyoming. The less similar to that lars of indebtedness which never would jurisdictions these re- situation in each of in- primary have been undertaken as a quires consideration here. debtedness, and which never would have In held in 1952that since Alabama it was permitted by public sentiment, been if solely financed was to be had been or believed known sec- proceeds bonds 94 of their of revenue ondary liability primary would become a forbidding lending constitution of credit through one the universal failure of Newberry municipality apply. did primary cry debtor. ultimate City Andalusia, 257 Ala. So.2d surety surety is: I would not have become support- 629. Numerous cited as cases if I had known or believed that I should ing principle. A announced review of pay have to the debt. This is as true predecessors these cases indicates and their states as of individuals. It re- was to concept that this court in emanated suretyship move this delusion of century, the nineteenth Garland v. Board of temptation snare of that this section County, Montgomery Revenue of 87 Ala. adopted. the Constitution was It with- 6 So. and has been echoed since held from the constituted authorities that time. power surety- state all function of ” Iowa, the case of Green v. of Mt. ship.’ Pleasant, Green of Mt. Pleasant, Iowa N.W.2d supra, 131 at N.W.2d 14-15. upon heavily proponent relied by the Thus, the conclusion of the Iowa court discloses, here. Examination how- seems to be that there is no loan of credit ever, *7 provision that the constitutional there unless there suretyship. in issue prohibiting loaning from Michigan, City Gaylord the case of of credit specifically its does not relate Beckett, 460, v. 378 Mich. 144 N.W.2d any holding jurisdiction so that in held that a under the Industrial Re- directly point. not be Additionally, Act Bond of 1963 did not con- the court in the cited case said that stitute a “loan credit” pro- of within the primary assumed neither secondary nor scription Michigan of art. Constitu- liability quoted as self-explanatory the was, however, tion. The court motivated Kendall, case of Grout v. 195 Iowa by the provision fact that mentioned was 192 N.W. 531: part “ constitution, a of a new for after allud- ‘What herein by is meant loan a ing to opponents various contentions of the * * * credit? particular This sec- concerning bonds their evils tion of our bodily Constitution was taken said, court at N.W.2d 467: from the Constitution of New York. As “ * * (cid:127)* part a York, delegates Constitution of New The to the 1961 Con past was the experience result of stitutional brought Convention the lend history York, ing provision of New but of credit into the 1963 Con other well, whereby aspiring states as new stitution a line of decisions which states had freely flatly loaned their credit stated that revenue bonds are not extravagantly corporate enterprises prohibition within lending of cred [Citing it. These decisions Manufacturing have Company, cases.] 82 Idaho language created for the constitutional a P.2d held a authorizing statute a mu- meaning that excludes nicipality revenue bonds to issue manufacturing, bonds for industrial, from the1definition credit.” of a loan of enterprises commercial to be provision. contravention of that Mexico, arose, strange In New situation opinion forthright in condemning the unanimously holding the court a statute proposal, 353 P.2d at 772: authorizing the issuance devel- “It questioned cannot be purpose opment unconstitu- of the act now before the court and the provi- tional as violative of a constitutional ordinance enacted plaintiff village city’s proscribing donating private sion pursuant thereto is to lend the credit and corporation, then, opinion after had faith municipality in aid of the de- issued, withdrawal, arranged been for its ** * corporation. fendant court, two, ap- a divided three to proved Village Deming “We are act. aware of decisions * * Hosdreg Company, states upholding 62 N.Mex. P.2d legislation. similar However, [Citing lending aspect of credit cases.] presented jurisdiction. was not in that “Some of these distinguish- decisions are able present case reason of Kentucky Since the court has said that in differences in the provi- constitutional projects of the nature here under consider But, sions respectfully involved. dis- ation “lending there is no of credit” and agree reasoning' with the by which the purported justify position, the situa conclusion others, is reached in jurisdiction tion in that significance. projects such as we have here do not Danville, In Norvell Ky., lending constitute a of the credit of the S.W.2d relying on two municipality. Such decisions read like opinions, City May earlier Bennett v. apologies to limitations, field, Ky., 323 S.W.2d and Faulconer by expediency. dictated City Danville, Ky. 468, 232 S.W. “It is prime pur- 2d obvious one of the fully stated that as reasoned out in poses having necessary opinions those bonds is- lending there was no municipal- sued and in the name of a credit because “no indebtedness oí the ity is to readily make them more salable Danville is created.” In the Bennett Thus, on the market. case, the credit of the 323 S.W.2d at 576 was said that municipality is extended in aid regarded since revenue bonds were not project, regardless of creating the limitations an municipality indebtedness of the placed upon remedy purchaser. meaning within provi of the debt limit ” * * * constitution, sions of the the transaction might be lending held not to constitute a Further reference to the Nebraska situar stated, credit. In Faulconer the court 232 tion is warranted. That state has a consti- *8 city only S.W.2d at became a provision tutional that the credit of the trustee, guarantor, not a creditor or the given state should not be loaned in the or did obligation bonds not constitute an individual, association, corpo- aid of an or city, only lending the and that there was the ration, and under a law identical to almost city’s name and its commitment to us, supreme the one here the before court render the described and services to lease held that in a case wherein the property consideration, the a collecting for proposed York for to issue revenue bonds dispensing the rents. purchase packing a and lease back of plant contravened, the the constitution was proscribes The constitution of Idaho a saying: city’s pledging directly its credit or indirect- “ * * * ly any to corporation, It clear the framers of and the court is .that Village prohibí- mind Moyie our Constitution had in a Springs, Aurora Idaho v. York, 271- loaning 164 Neb. N.W.2d the credit giving or against tion thereof 272. subdivision or of the State * * * It purpose. purely private a for Following positive clearcut and de- this * * * protect the prohibition is a cision, Nebraska, apparently people of political subdivisions and its State lending public support interested in credit in private involvement financial reckless private corporations purpose for the enterprises supposed to serve development, their industrial added to in fact dominated good are but which alia, XV, 16, stating, inter stitution art. * * * private interest. notwithstanding that are not bonds that the revenue “It true is for industrial constitution revenue bonds they are liability city and general issued, a whereupon enterprises might be an- through payment the exer- filed, not Meyer ex rel. other suit was State they But do taxing power. cise of 195, 113 County Lancaster, 173 Neb. city with reference upon the cast burdens 63, challenging the issuance of N.W.2d city payment. The their issuance bonds, be court held the statute to charged are and its officers constitutional, that over the contention collecting the rentals fixing duty of gave private corporations substantial bene- are to be revenue bonds which the from saying, fit at “The effect N.W.2d paid. the execution necessitates This county its is to loan the credit of the rentals, taking leases, fixing private corporation. exempt tax to a status equipment secure mortgages on chattel also, a there is a donation of a sense ** imposes *. It payment rent property, yet specifically author- all this is city upon responsibilities duties sup- (Emphasis ized the amendment.” matters which officers on and its plied.) case decided in This latter was private public in character. rather than in the name of the bonds The issuance of say pretend the kind of We will not payment the cost of legislature in financing authorized fact evidences the art. 8 of S.L. of ch. Ch. The has been extended. credit of 1965, good or desirable. Such payer of the bonds is the municipal because resorted to has been payment. The primarily their liable for taxation, exempt Federal bonds are city. obligations of the become the able to use have been communities and small payment is fact the means of encourage local tax-exempt status to make it less so. A limited does not it is development. No doubt payment default is a failure of see fit Congress until a matter of time prohibition city. does The constitutional exemptions remove tax of the State or infer that the credit revenue bonds. may given political subdivisions meantime, it is understandable liability ex- In the except general loaned when seen supreme courts have provides state prohibition clearly a number of ists. The down, contrary to constitu- fit to strike that the credit of It individual, legislation. concepts, this kind of given an associa- tional or loaned to supreme reason tion, any circum- not without corporation under Moyie Springs, Idaho, Village political or a court of the State stances. When Manufacturing Company, Aurora payer Idaho v. thereof becomes subdivision *9 fit to saw in- 82 Idaho evidence of bond or other revenue benefited point that those industries ac- out used in the debtedness which is to be ad- financing have an could bond complishment private as distin- revenue of a in- private-enterprise vantage the credit over guished public purpose, from a toward social- dustries, resulting in a trend given or loaned of the State has been * * City of ism. *.” ex rel. Beck v. However, it originally we do not deem our held Nebraska’s revenue bond duty prerogative pass upon or the virtues statute unconstitutional, in State ex legislation. or City York, evils We do have the re rel. Beck v. 164 Neb. sponsibility saying given in a 269, 271, situation N.W.2d said: “It is true that the is, responsibility what the law but not the revenue general bonds are not a liability of saying ought ought what it or city not be. they payment are not Hence, position we take the in this case that through taxing power.” exercise of power legislature is within the of the If courts, opposite points which take authorize or withhold authorization fi lending credit, view to the relative can nancing by industrial revenue bonds—as agree that revenue bonds such as here those long as constitutional limitations are not ex general involved a liability are not ceeded. city subj payment and are not through ect to respect With city to the limitation that a taxing power, the exercise of the ought shall give not 'loan or its credit to or in aid justified adhering principle be to the corporation, of a legislature has taken and bondholders them- pains prohibit selves, to restrict and this from courts, responsi- not the will be being Thus, 94(a) done. of art. ble for type whatever results from this spelled has safeguards, out three different financing. which are: recognize right We have to the inherent by municipality parties “No bonds issued a or they to contract as see fit. If a

county general article purchaser, be bond eyes open, with his wide obligations municipality or coun- fit purchase sees revenue bonds of the ty.” Project Frontier for the sake of a Federal advantage, tax certainly he will be on notice coupons, 2. “Bonds and interest do of the fact that any pe- there never pecuniary constitute nor rise to a cuniary liability against Chey- liability municipality county or or enne, and only that he will be able to look charge against a general its credit or the revenues of the and the taxing powers.” project property payment itself for of his .3. “These limitations shall stated expressed clearly bonds. itWith in the law clearly on the face each bond.” and on the face of each bond that neither 95(a) Section of the act authorizes taxing power the credit nor of the munici- security devices “that do not constitute a pality pledged, no bondholder will ever general obligation municipality or say be heard to he was deceived that he or county.” provides Section 95(b) a munici- thought otherwise. pality county obligate or shall not ex- itself provision The constitutional arewe cept respect ap- discussing precludes loaning a from or plication revenues, of its and “shall not giving its credit to or in aid of an individual pecuniary liability incur a charge upon or a corporation. or prohibit This does not general its against taxing pow- credit or aiding benefiting corpora or er.” 95(d) again And states no breach tion, if its credit is not involved. Licenses any mortgage agreement may impose any frequently granted by franchises are “pecuniary liability” upon a municipality or cities counties to individuals and cor county any charge upon general their porations. recipients No doubt the receive credit taxing power. their aid and benefit, but no credit is In a case, similar revenue bond in Green involved. Pleasant, Mt. 256 Iowa supreme N.W.2d court of already Iowa We have reviewed the cases said: pri- assumes neither from other important states which “[h]ere we deem mary secondary liability nor way.” on of whether Also, supreme Nebraska, industiral revenue bonds con- *10 84 n stitutes Baker, Wyo. 273, 323 P. tion. Braten v. giving credit. lending or of 931, 929, rehearing denied 325 P.2d opinion. 2d unanimity There- is no

There rule in 880. fore, following the well-established legisla- an act of the jurisdiction that this why ac- no reason we should not We see declared unconstitutional ture will not say cept reasoning of these cases ap- unconstitutionality clearly unless its optional provisions lease of the Frontier legislature the

pears, to the will leave an donation of do not constitute unlawful deciding type whether this responsibility of city property. public interest. the best financing is in negative brings to a answer to This us 286, Kinne, Wyo., 395 P.2d Kuntz v. See question by 3 as reserved to us the district Company 288; v. Zale Bulova Watch Jew- ques- court, means we answer such Cheyenne, Wyo., P.2d elry Company of by saying tion authorized Casper, Wyo., 409, 417, Steffey v. 8, 1, 112, Wyoming ch. art. Ch. S.L. of rehearing 456, 468, modified on 1965, by Cheyenne 1535and Ordinances P.2d 951. lending pub- 1538 does not constitute the private purpose lic credit for a in contra- project property in The lease on the 16, 6, Wyoming Constitu- vention of art. § Refining Frontier grants case this tion. option Company to an renew lessee five-year periods lease for four consecutive No. 1 Question n project prop option purchase the to to us The first reserved required pay to erty for the amount industrial de- district court is whether the full, expenses incident all costs city velopment projects act and ordinances thereto, nominal sum of and an additional consideration, together with the in- $100. carrying out struments executed city clerk, Appellant, suggests the delegations of project, Frontier contain option prop constitutes a donation of 7, 1, power contravention of art. § 16, 6, erty contrary to art. § 3, 37, Wyoming art. Constitution. § admits, however, Constitution. She absolute, simply arbi- declares Art. issue been decided in favor of the has lives, trary power liberty and over the jurisdictions held that those which have property freemen exist nowhere in a re- lending the transaction does not amount to proposed public.' suggestion exer- No credit, option inclusion of an power is made the defend- cise of such any purchase make does not difference. ant, any authority or rea- nor are we shown Ky., Mayfield, Bennett S.W. delegation of arbi- son to believe there is a 2d 576. trary power. usually upheld Courts have indeed such 3, 37,-it respect art. reads: With options theory options on any delegate “The shall not appropriate integral part .an of the en commissioner, special private corporation tire transaction between lessor and lessee. make, super- association, power City Andalusia, Newberry v. 257 Ala. municipal im- interfere with vise or 637; Meyer 57 So.2d ex rel. effects, provements, moneys, property or County Lancaster, 173 N. Neb. otherwise, whether held in trust or 63, 68;. County of W.2d Darnell v. Mont levy taxes, perform any municipal or to gomery, 202 Tenn. 308 S.W.2d functions whatever.” 375; County Fairfax Industrial Devel 374 - delegation suggestion of a opment Authority Coyner, 207 Va. power in contravention of art. There, course, can be S.E.2d receive, power have trustee’s purchase option no doubt that a renewal or n containedin a lease is custody de- of and disburse revenues supported ade in- quate from the is an rived original considera- consideration —the

85 delegation. argues delegation valid Defendant legislative power of although by rule announced this court in Rodin v. authorized issuance of any bonds at rate State, Wyo., interest, 417 P.2d is not here any period time, over and applicable develop any Also, because industrial for amount. in the Stewart case projects any just said, ment act does not direc cited our performance if any nor guide municipal tions establish standards functions is under the control and municipal control the elected trustee. authorities, the con- stitutional provision legisla- prohibiting the The recognize may act does be a there ture from delegating any special commis- mortgage.” "trustee under a find it We power sioner supervise or interfere with clear, very however, pro- from numerous any municipal function is not violated. act, ordinances, agree- visions of the and parties, powers ments As performance whether re- such trustee would -be limited to functions in the case at hand is under ceiving apply- revenues from the and the control of municipal elected author- ities, point ing them to a the bonds in retirement of out issues mortgage agree- accordance with sells pro- revenue bonds. The parties. deposited ment ceeds are Project In the Rodin case we in the Ac- quisition powers trustee, said no were conferred nor duties Account with the who pursuant imposed upon disburses city’s bank other than escrow instructions. inherently by deposi- Counter-signatures those undertaken all of two officials required. are tories of funds. The same here —no Rental and other is true revenues powers from delegated deposited the leased duties are to a trustee are in the Fund, Bond inherently Account, than other those undertaken Administration mortgage. a trustee Maintenance Fund. The funds are in the custody, trustee’s but disbursements there- prohibition The specifically are limited purely against delegation power is intended to administrative. protect against taxing exercise Gregory City In Lewisport, Ky., 369 power purely municipal functions 133, 136-137, upheld S.W.2d the court people’s officials not con validity of an industrial revenue bond Tp. trol. Evans v. Norriton West Munici similar to the one considered pal Authority, 150, 474, 479; 370 Pa. 87 A.2d us and held delega- there was no unlawful Philadelphia, Wilson v. School Dist. of powers tion of because governmental 225, 90, 1401; 99, 328 Pa. 195 A. 133 A.L.R. powers were surrendered. in- What was County Board Albany Commissioners of volved, said, the court simply was details County White, Wyo. 335 P.2d proprietary transaction. 433, 442. Matters administrative light In of these considerations we delegated violating without the con question would answer reserved prohibition against legisla stitutional negative, by saying of the in delegating special ture to a commissioner act, dustrial projects power supervise or interfere with Ordinances 1535 and and instruments function. Stewart v. parties executed Frontier Cheyenne, Wyo. 497, 356; Project, delegations power do not contain County Kleiber v. of San Fran contravention of art. or art. cisco, 18 Cal.2d P.2d 37, Wyoming Constitution. Ferguson City State ex rel. of Pitts Question 2No. burg, 78-79, 188 Kan. P.2d specifically authorizing held that an act second to us is reserved specified cities to issue revenue bonds for whether the financing authorized purposes did development projects not amount to an unlawful act and *12 requir- public purpose Cheyenne operation for a as continuance of the

ordinances is to be by Wyoming warranted, improvements Constitution. substantial ed and art. § course, essential; additions question assumes art. Of that most § public part purchase price $18,000,000' requires to be for some such may discharge will purpose. other states be used to Constitutions of indebtedness find impose requirement, Refining prop- but we entire Frontier Company such a ; 13, 3, $4,500,000 erties and nothing expend- of our constitution that if the is art. ed requirement, expansion unless for modernization imposes which such a proj it thirty is to be ect is we assume a tax or assessment “estimated” an additional persons employed Cheyenne be collected, or that a debt is to would be in the levied- operations. contracted. Although pertinent language testimony meager, in art. it'

The contained was concerned, defendant,- by question 2 is not controverted as far as authority proposition is and there is this: for judicial that notice will be taken of the “ * * * shall no tax or assessment public flowing economic benefits new collected, or be levied or debts contracted expanded industry. City or See of Frost by municipal except pur- corporations Jenkins, burg Md. 136 A.2d la;w purposes speci- public for suance 856; County De Fairfax Industrial fied law’.” velopment Authority Coyner, 207 Va. tell, As near .as we can there has been no event, 150 S.E.2d 92. In in the ab suggestion arguments in the briefs or oral will, contrary, showing sence of a we - any is effect that tax assessment respect' finding disturb the court’s with - contemplated. public purpose, finding to a was as which debt n follows: concerned, far our an- As' as a that swer to 3 is to the effect acquisition “Plaintiff’s of The Frontier located, Cheyenne’s given. credit is not loaned or refinery Company’s Refining oil holding Inherent that that answer is promote the City Cheyenne, Cheyenne City debt -the of- is no' economic welfare of the being say, If we are contracted.' as respects: following and its residents ’ saying, being that no debt is contracted employment, Increase stimulate industrial ques- municipality, then- we have revenues,' activity, augment tax sources of con- tion to answer as to 'whether a debt is stability, improve foster economic purfeuance public tracted .in- law for a economy.” City’s the balance in the purpose specified by law. Moreover, apparent the' it is to us legislature by authorizing the exact munici- However, it is may argued it be involved, impliedly pal function here has elementary municipal corporations present is determined that there whatever pro engage governmental or in either public purpose may essential. be Subse- public prietary which have no functions quent author- being to the Frontier Dan purpose. Faulconer See ized, the in- has amended ville, Ky. 468, 82-83. 232 S.W.2d spe- development projects dustrial act this, In view of we think we should cifically projects declared finding some attention to the of a public purposes. 1(b), S.- stitute Ch. purpose by the trial court. This amendment L. of evidence can concrete ratify the former im- tends to confirm pointed deposition be of the Senior legislature. plied determination of Operations Fron- Vice President or con particular act Company. tier the 25- Whether Refining He states “public purpose” is a of law duct is a matter year-old plant’s physical are bor- facilities question. judicial and not a dering and, for competitive determination on obsolescence fact; however, legislative true, .of where now considered us. This purpose” appar indicated, judgment “public as to a ds the court even if was a there ent, judgment (cid:127)mortgage, long pay- will not interfered mortgage as the judicial wholly mind prop- unless the able out courts of the income of the erty purchased rela reasonable property. 'conceives without resort to such *13 public tion interest and welfare. ample There is authority other from Eagle Point, Polanski v. Town of 30 Wis.2d jurisdictions saying self-liquidating for 507, 285; 281, City Tulsa 141 N.W.2d projects involving such industrial revenue 214; Williamson, Okl., 209, v. 276 P.2d as are bonds here involved create do not County Development Fairfax Industrial an meaning indebtedness within the Coyner, 351, Authority v. Va. 150 S.E. 207 Newberry constitutional debt limitations. 93; 87, City 2d and Dan Faulconer v. City Andalusia, 49, 57 257 Ala. Ky. 468, 80, ville, 313 82-83. 232 S.W.2d 629, 636; County So.2d ex rel. Court Regardless County Demus, de- of Marion of whether base our we 148 W.Va. 398, 135 offered, 352, 359; testimony Wayland cision a Snapp, on the or on S.E.2d 57, judicial determination, 633, 637; 232 Ark. apparent Opinion or on an 334 S.W.2d 683, by legislature, Justices, determination of the we are 161 Me. 210 A.2d conclusion, stated, brought already to the 699. as respect the court’s a finding with

.that answering previous In questions, have public purpose should not disturbed. already taken position debt no being by City Cheyenne contracted said, light In the of what we have in connection with the issuance revenue question answer 2 in the affirmative .we development bonds the industrial say and financing by authorized projects act. this, It follows from without development projects industrial and act explanations, further is not public (cid:127)ordinances purpose fulfills whatever an creating indebtedness excess of required by .may be law. stitutional limitations. Question No. 4 question We therefore answer 4 in the negative say and The question by industrial .revenue fourth reserved financing bond authorized and 'district court act is whether the industrial ordinances referred do not contravene financing revenue' bond authorized to' municipal .prescribed legislation debt limitations we have under consideration and.5, art. Wyoming Consti- contravenes the §§ debt limitations tution. prescribed by Wyoming art. and §§ pro- Constitution. The sections referred to Question No. 5 generally that debt in wide excess questions last of the reserved year

'the taxes for the current shall is this: Does the industrial revenue bond by any city, creáted and that no shall n creáte authorized art. and Ordi exceeding per indebtedness four 1538, by providing nances and for cent of the assessed value of taxable property,, taxation contravene property city. within the art. Wyoming Constitution, which Cheyenne, Laverents v. exempts municipal property from taxation? Wyo. 877, 880-881, this generally purchase held property provision The constitutional referred'to by municipality, paid wholly to be for was amended in and out according joint income and proposing revenue from resolution property amendment, and liability without purpose on the was.-to allow part public of the municipality, property governmental did not not for a used rise purpose to an Therefore,, “indebtedness” within the mean- taxed. as art. ing reads, of the constitutional debt prpperty-of limitations now the United towns, counties, state, cities, following paragraphs sufficient for

States, municipal corporations purpose: school districts taxation, “when exempt shall be industrial revenue 1. The purpose.” governmental primarily used here the act and ordinances authorized pro municipality has both A contends, not, appellant considered do powers, and prietary governmental property Cheyenne taxpayers of deprive acquires when the process of law do without due leases the Frontier industrial equal protection Courts deny of the laws. exercising a property, he authorizing generally held acts have governmental proprietary and not bonds do revenue Big Horn Canal function. Seaman v. See process provisions violate constitutional due 940; Ass’n., Wyo. 213 P. laws, deny equal protection *14 Danville, City Ky. 313 Faulconer v. of nothing in the act or ordi we are shown 468, 80, 232 84. S.W.2d could being nances considered which project property process It follows that the will legitimate question due rise to a of primarily governmental equal not be used for a ex rel. protection. See purpose, consequently quite proper City it is Kan. Ferguson Pittsburg, of 188 subject 612, 80; City 71, it to taxation Albritton v. 364 P.2d 15, pursuant 75, 799, Winona, to the 1956 amendment art. 178 So. of 181 Miss. 1436, 803-804, on A.L.R. dismissed 12. § 627, 766, appeal L.Ed. 58 S.Ct. U.S. Therefore, question 5 our answer 1088; Frostburg Jenkins, City of negative is in effect that the the to the 9, 852, 854-855. 215 Md. 136 A.2d financing by the de- authorized industrial velopment projects act and ordinances development The industrial 2. of does contravene art. litigation projects questioned in act 12, Wyoming Constitution. § provides, project subject in is § taxation, project leased but if the is District Court Conclusions by private to or held interests on both appeal, In her clerk asserts levy any year. assessment date and date in finding of the district court to effect Appellant challenges being in this as con acquisition property of the Frontier 15, 11, Wyoming Con travention of art. § promote the economic of welfare overlooks, appellant how stitution. What City Cheyenne of is erroneous. In our con- ever, require the is that 99 does not question sideration of we said we would project same to be leased to or held finding disturb the of the district “private date interests” on the assessment regard to the Frontier levy date. are essential Two acts public being purpose. for a The conclusion fixing (1) in of a the assessment tax — point disposes reached at appellant’s levy. ordinarily Properties (2) assignment finding of error on the court’s private ownership regardless taxable in of fact pertaining public purpose, to a changes ownership be taxed and will and we need not comment further on such person if one time and owns' at assessment finding. levy. another owns at the time of the are, however, projects

There the case of such as we are con certain conclusions however, sidering, law which cannot be defendant-clerk has objected by private to and taxed it appeal. now unless is leased to or held raises on Although nothing dates, argu- although more interests on both than token as we have ment has been support private made in said can different of these interests. objections, considered, we think This situation lack we should list them there is no only briefly uniformity comment on each in assessment for taxation conclusion challenged required by law appellant’s brief. constitution. pro Appellant suggests general

3. codification and revision of posed laws. revenue bond 15, 7, Wyo violates the of art. suggestion 5. There is a Constitution,

ming depositories relating to appellant the industrial However, identical funds. projects public policy act contravenes contrary question was raised and settled delegates invalid because unreasonable appellant’s contention in Rodin v. State discretionary powers city, in that to the Cheyenne, Wyo., P.2d ex rel. provide the act fails for maximum holding the Rodin 189-190. Our rate of interest on or a minimum the bonds question dispose case is sufficient to price at which such bonds be sold. We here. already have held there is no unreasonable delegation powers. unlawful More question raised Another over, in previous our discussion of appellant Chapter whether the title to 1 pertaining delegation powers, (Original House S.L. Ferguson referred to State ex rel. 9), Bill No. is sufficient to embrace Pittsburg, 188 Kan. development projects of industrial 71, 78-79, wherein it was held a similar Chapter as contained in ch. art. act did delegation not amount to an unlawful requirements in accordance with the powers, though even act that case 24, Wyoming Constitution, art. *15 any authorized the issuance of bonds at pertinent part: reads in interest, period time, any rate of over of bill, except appropriation general “No and for amount. and bills bills for the codification and 6. In the first six of law conclusions laws, general revision shall of findings the trial court were made to passed containing subject, more than one city the effect the all and ordinances clearly expressed shall be in its agreements pertaining and instruments * * title project, the including Frontier those for In Wyoming 1963 the Statute Revision purchase, the leasing mortgaging and of legis- Commission was authorized the project, the legal. Appellant are valid and compile Wyo- lature to all the statutes of challenges claiming these conclusions of law ming relating to or concerned cities with (a) Ordinance 1538 is invalid because the Wyoming and towns. Ch. S.L. of published; exhibits annexed to it were not complied 1963. The Commission with this (b) and development projects the industrial enacted, legislature directive and the 1965 act acquisition does not authorize the of municipal code, Chapter 112, as a S.L. of already facilities in existence. Wyoming in this 1965. The act involved 15.1-16, (a) Section W.S. appears 8, Chapter suit as ch. art. requires (Complied 1965) every ordinance Chapter pertinent The title to in reads published newspaper at in a least once part: city, general of circulation within provide organiza- “AN ACT to becoming before effective. Ordinance tion, operation, government and of attached published, so but exhibits cities and towns State published. exhibits These thereto were * * *_» copies agreement, purchase were of the asset Therefore, having do Chapter indenture, (Original and the lease House 9) having project. Bill with the The ordinance No. been a Frontier bill for the codi- general copies fication these instru and itself did state that revision of the laws relating office of to or ments were on file in the concerned with cities towns, inspection. It art. clerk and available for had constitution § clear, course, application purpose no of the. is to it because it came exception fulfilled. pertaining requiring publication was statute to bills for ¿f property acquired where in the' nature of is the first The public was ádvi'Sé'd ordinance, procedures con- copies the instruments instance to those - erred, templated (as stated in the act. In this case the- ref to therein were available (cid:127) ruling acquisition purchase ordinance). accept agree- asset We. the-publication comply respects was ment all act of the trial court that legally Municipal legally McQuillin, must therefore be considered sufficient. 5 16.80, p. 304, say Ed.), sufficient. This not to future con- Corporations (3rd project might having with the Department Highways tracts do Pallasta v. Colorado, general hot come under certain 153 Colo. are, 25, 26-27, ruling. statutes, contracts is not authority for such where contract part original acquisition transaction.' (b) does au We think act Summary already acquisition thorize the facilities 92(a) “project” In art. existence.' 1, 3, 4, questions We have answered ' any land, building defined or other as court,’ as reserved to us the district improvement, personal and all real and negative; and we answered have - properties necessary in there connection question 2 in the affirmative. existence,” with, “whether' or not words, questions our all answer to is to the- manufacturing suitable or industrial effect the industrial enterprises. Also, grants a munic projects act related ordinances' ipality power acquire, whether do not contravene construction, devise, “purchase,” gift, or Therefore, far to. referred as lease, Thus, projects. one or more the act questions the constitutional raised eminently makes clear the concerned, áre act and ordinances acquire intended a should be able to constitutional and valid. already Massey facilities in existence. See We also have found reversible error Franklin, Ky., 384 S.W.2d *16 any findings of the or conclusions fact 506. appealed of law from. af~; Appellant the further attacks findings Such are and conclusions validity of the by claiming firmed, Frontier questions with reserved answered- acquisition of the and the asset opinion, as indicated in the casé- this purchase agreement general entry violate judgment- is remanded for the '' Wyoming. contracts statutes opinion. with consistent this statutes referred to have.to do with such HARNSBERGER, participate J.,C.

matters as the municipal property sale of - ing. generally; public improve contracts for contractors; generally;' ments bonds for PARKER, (dissents GRAY and commission; Justices functions planning ing). competitive bidding letting on the of con contracts; competitive bidding any prevail- struction adopting Without view in the city property. ing sale opinion except part We think that which relates procedures properties general analysis to acquiring for historical bonds, issuing specific reluctantly aré that and definite revenue we concede ques- act. there is to projects insufficient basis hold Special statutory legislation tioned be authorizations contained to unconstitutional supersede conceivably necessarily general might apply permissible,, act will to statutory provisions, situations, negative especially (as factual and on the where happened approach instance) general pro in this that an act prior adopted visions were to or at not be declared unconstitutional unless unconstitutionality clearly appears, do special same time authorizations. Moreover, given dealing challenge to reserved we are with situation the answers do, ness,” -questions through City five. how- when we one We said in Laverents v. ever, Cheyenne, opinion particularly Wyo. find the fallacious P.2d two, that answering its statement to constitute a debt within provisions [Cheyenne’s that credit “Inherent in answer of Art. “it must be payable part, given] holding is not or loaned is a in whole or in out n general municipality.” debt resources of the being contracted.” This court has not necessity at Although we see no pass upon heretofore had occasion to premise addressing time ourselves to the meaning of “debts” as used in Art. judicial notice be taken of Const., Wyo. but that word has been public flowing from new economic benefits obligations arising defined as or demands expanded industry, we recoil contracts, express, out of implied quasi. given legislature has intimation that Ballentine, Dictionary, p. (2 ed.). Law authority municipalities carte blanche case, In the instant 11 of Ordinance 1538 millions of borrow dollars provides : pro of benefits. forma determination “new” Obviously, in the case no instant “The of this ordinance shall be Cheyenne, industry being brought into

deemed to be and shall constitute any fail find real indication tract between the and holders from industry. “expanded” that this is to be an time time coupons Bonds and the Operations President The Senior Vice appertaining thereto and of said Refining Company stated of the Frontier may sue, any action, holders in manda- mus, twenty-five-year-old plant’s physical injunction, proceedings, or other competitive bordering on facilities are either equity at law or in to enforce or compel obsolescence and for continuance performance of all duties or an n obligation warranted,, Cheyenne operation sub- required by this ordinance improvements stantial and additions performed City. done or said n » * ** essential; part the most $18,000,000 purchase price will be of some Perhaps the opinion writer of the here discharge used the indebtedness of lias accorded thinking his on this Company prop- Refining entire Frontier with that of the Alabama and Iowa courts ; erties if the is consummat- n when they have said that the constitutional $4,500,000 ed, ex- approximately use of “loan suretyship of credit” meant pended Cheyenne refinery to im- on the *17 by n reasoning saying is “debt” prove it and an ad- and modernize estimated is not a debt if there understanding thirty persons required in ditional then repayment which the of the amount Cheyenne. presented Nothing was to show involve the use of tax revenues. the obsolescence would be cured However, we are legal unaware of expenditure proposed sum or basis for such reasoning, and to us it is plant going would be a successful or unquestionable that framers of cern if fail to the bonds were issued. We recognized Constitution an ele- comparable see a situation such this as as mentary principle when in Art. expanded industry, a new or and since they powers restricted the evidence to constitute a showing fails clear corporations contracting of debts public purpose served, that a is to be pursuance except of law accordingly charge hold defendant’s purposes specified by law. Such restriction finding of error to the court’s to be well interpretation is consistent with court’s taken and judgment reverse the on this Const., ground. Wyo. of Art. “Public Indebted-

Case Details

Case Name: Uhls v. State Ex Rel. City of Cheyenne
Court Name: Wyoming Supreme Court
Date Published: Jun 12, 1967
Citation: 429 P.2d 74
Docket Number: 3589
Court Abbreviation: Wyo.
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