Title: BURRITT SAFEWAY v CITY OF BUTTE

State: montana

Issuer: Montana Supreme Court

Document:

No. 12312 I N THE SUPREME C O U R T OF THE STATE O F 1VIONTANA 1973 K E N N E T H R e BURRITT, d/b/a BURRITT ANIMAL HOSPITAL, E & L REAL ESTATE C O M P A N Y , INC., a Montana corporation, BUTTE PLAZA, I N C . , a corporation, and ROMNEY INTERNATIONAL HOTEL, I N C . , a Delaware Corpora t i o n , P l a i n t i f f s and Appellants, CITY OF BUTTE, A Municipal corporation, Defendant and Respondent. -s%-.".------- SAFEWAY STORES, I N C . , et a l , P l a i n t i f f s and Appellants, -vs - / CITY O F BUTTE, A Municipal corporation, Defendant and Respondent. Appeal from: D i s t r i c t Court of t h e Second J u d i c i a l D i s t r i c t , Honorable Nat Allen, Judge presiding. Counsel of Record: For Appel-lants : Poore, McKenzie and Roth, Butte, Montana Urban L. Roth argued, Butte, Montana For Respondents: John A. Alexander argued, and C . L. Harrington appeared, Butte, Montana Submitted : February 28, 1973 : M A R 2 6 1973 Filed : M&R 2 6 1973 &@@-+ Clerk M r . J u s t i c e Frank I, Haswell delivered the Opinion of the Court. This i s an appeal by four property owners and two lessees of p a r t of t h e i r property from a judgment of the d i s t r i c t court of Silver B o w County, t h e Hon. Nat Allen, d i s t r i c t judge presiding, validating the annexation of t h e i r property i n t o the c i t y l i m i t s of Butte, Montana. From a consolidated judgment i n two cases denying t h e i r applications f o r a w r i t of prohibition against the City of Butte t o prevent annexation, the property owners and t h e i r lessees appeal. For simplicity of i d e n t i f i c a t i o n , w e s h a l l r e f e r t o p l a i n t i f f s a s B u r r i t t , Romney Hotels, E & L Real Estate, Butte Plaza, Safeway, and Third Wallingford, respectively, Defendant City of Butte w i l l be referred t o a s the City. Three of the four landowners of t h e annexed property a r e corporations, being Romney Hotels, E & L Real Estate, and Third Wallingford. The fourth landowner i s a p r i v a t e person, B u r r i t t , operating an animal h o s p i t a l but not residing i n t h e annexed area. P l a i n t i f f s Butte Plaza and Safeway a r e lessees of a portion of the annexed property from E & L Real Estate and Third Wallingford, respectively. Two separate s u i t s were f i l e d contesting the annexation which were subsequently consolidated. The d i s t r i c t court made the following findings of f a c t which were not disputed. The land owned by E & L Real Estate i s leased by Butte Plaza, a partnership, and used a s a t y p i c a l r e t a i l shopping center which includes a grocery s t o r e , drug s t o r e , r e a l e s t a t e o f f i c e , tavern, restaurant, department s t o r e , barber shop, fabric s t o r e , shoe s t o r e , v a r i e t y s t o r e , and a movie theater. The land owned by Romney Hotels i s used a s a motel with a restaurant, bar, and a gas s t a t i o n located thereon. The land owned by Third Wallingford i s leased t o Safeway and used a s a r e t a i l grocery s t o r e containing an in-store bakery and meat counter. The land owned by B u r r i t t i s used f o r a veterinary o f f i c e and animal hospital. P l a i n t i f f s excepted only t o Findings X I 1 1 and XIV, which s t a t e d i n substance t h a t none of the p l a i n t i f f s a r e resident freeholders of the property sought t o be annexed and t h a t none of the land annexed was used f o r i n d u s t r i a l o r manufacturing purposes, within the meaning of section 11-403, R.C.M, 1947. P l a i n t i f f s do not r a i s e upon t h i s appeal any objections regarding the procedure followed by the City i n the annexation, Therefore, we s h a l l consider t h a t the City followed the statutory procedure f o r annexation a s s e t f o r t h i n section 11-403, R.C.M. 1947. From the d i s t r i c t court's judgment quashing the alterna- t i v e w r i t s of prohibition previously issued and dismissing the consolidated action, p l a i n t i f f s now appeal. The issues presented f o r review may be summarized: (1) Is any of the annexed land used f o r i n d u s t r i a l o r manufacturing purposes within the meaning of section 11-403, R..C.M. 1947? (2) Are any of the p l a i n t i f f s resident freeholders of the annexed properties? (3) Does section 11-403, R.C.M. 1947, e s t a b l i s h discriminatory c l a s s i f i c a t i o n s without compelling j u s t i f i c a t i o n i n v i o l a t i o n of the Equal Protection Clause of the Fourteenth Amendment t o the United States Constitution? P l a i n t i f f s contend i n i t i a l l y t h a t the annexed land was used f o r "industrial purposes" within the meaning of section 11-403(1), R.C.M. 1947, thereby requiring written consent of the landowners f o r annexation i n t o the c i t y . This limitation was added by the l e g i s l a t u r e i n 1961. The Court's function i s t o construe the language of the s t a t u t e i n accordance with i t s usual and ordinary acceptance, with a view t o giving v i t a l i t y t o and making operative a l l pro- visions of the law and accomplishing the intention of the legis- l a t u r e when ascertainable. Section 93-401-16, R.C.M. 1947; County of H i l l v. County of Liberty, 62 Mont. 15, 203 P. 500. I n t e r - preting section 11-403, R.C.M. 1947, i n i t s e n t i r e t y it i s logical to presume that the legislature intended to make the annexation process easier in larger cities and at the same time permit designated residents, freeholders, or businesses a voice in this process, Plaintiffs would have us construe "industrial purpose" in its broad sense to include what are generally termed commer- cial, mercantile, trade, or professional pursuits. Thus the businesses involved here --- a commercial shopping center with a number of retail stores, a motel, a gas station, a barber shop, a real estate office, a movie theater and a veterinary office and animal hospital---would be within the definition of "indus- trial purpose". Plaintiffs' expert witness, an economist, gave a technical de- finition of "industrial", one that would be used among economists. It is not the usual, ordinary, or commonly understood definition of the word. Likewise, plaintiffs' dictionary definition of I' "industrial" is too broad. Defining "industry" as any depart- ment or branch of art, occupation, or business conducted as a rneans of livelihood or for a profit; especially, one which employs much labor and capital and is a distinct branch of trade", is such a broad classification that it would effectively block any annexation attempt where a business is involved and thus destroy the purpose of the statute. l lack's Law Dictionary 4th Ed.) Plaintiffs cite an 1888 case, Carver Mercantile Co. v. Hulme, 7 Mont. 566, 19 P. 213, as autho~~ity for using a broad definition of "industrial". Carver involved the authority to organize corporations and adopted a broad definition to accommodate the purpose of the incorporation statute. The same or similar purpose does not exist in the annexation statute here so Carver is readily distinguishable. The goal of statutory interpretations is to give effect to the purpose of the statute. County of Hill v. County of Liberty, supra. To give effect to the purpose of the statute as intended by the legislature, the context in which the words are used is more important than precise grammatical rules or a dictionary definition. Home Bldg, & Loan v. Bd. of Equalization, 141 Mont. 113, 375 P.2d 312. For the purposes of section 11-403, R.C.M. 1947, we adopt a more limited definition of industrial purpose. "Industrial purpose" is limited to any factory, business or concern which is engaged primarily in the manufacture or assembly of goods or processing of raw materials unserviceable in their natural state which are extracted, processed, or made fit for use or are substantially altered or treated so as to create commercial products or materials. This definition is similar to that given by the legislature in establishing a classification and defining "new industrial" business for purpose of taxation. Section 84-301, R.C.M. 1947. This section specifically excludes property used by retail or wholesale merchants, commercial services of any type, agriculture, trades, or professions. That statutory classification was enacted by the Montana legislature in 1961, the same year the "industrial and manufacturing" clause was added to section 11-403, R.C.M, 1947. 1 1 In addition, the distinction made between commercial" and "industrial" in Calvert v. City of Great Falls, 154 Mont. 213, 462 P.2d 182, leads us to believe the legislature intended such limited definition. Nonetheless, plaintiffs argue that the bakery and meat market in the Safeway store renders that property, at least, industrial, We observe that this in-store bakery and meat market are merely incidental to the operation of Safeway's principal business on the premises, a retail grocery. Under the foregoing definition of industrial which we have adopted in this case, these incidental operations do not convert safeway's principal business into an "industrial" operation in any event, None of plaintiffs involved here qualify under this limited definition of "industrial purpcse". The next issue raised is whether the definition of I f resident freeholder" under section 11-403, R.C.M. 1947, in- cludes a corporation, This section provides i n pertinent part: 11 J; -1- - t h a t such resolution [of annexation] s h a l l not be adopted by such council i f disapproved, i n writing, by a majority of the resident freeholders, i f any of the t e r r i t o r y proposed t o be embraced -/c ik * I n Kunesh v. City of Great F a l l s , 132 Mont. 285, 317 P.2d 297, t h i s Court defined "resident freeholder" f o r the purposes of t h i s section a s one who is a resident within the area t o be annexed, holding a present l e g a l t i t l e t o a freehold e s t a t e i n r e a l property located within the area t o be annexed, Such de- f i n i t i o n was reaffirmed i n Brodie v, City of I\lissoula, 155 Mont. 1-85, 468 P.2d 778. Neither case however, deals with t h e specific problem of the residence of a corporation. Section 11-403, R.C.M. 1947, provides t h a t the protesters must l i v e i n the area t o be annexed and have a freehold i n t e r e s t i n land i n the area. I n the i n s t a n t case, four of the p l a i n t i f f s a r e corporations, one is a partnership, and one i s a natural person, In Ihnesh a t pages 289,290 of 132 Mont,, t h i s Court discussed the requirements of "residence" a t length: "Residence has been defined a s t h e place where a man makes h i s home 9 ; ; ? and t h a t residence '* 9 ; J : i s the place where one remains when not called elsewhere f o r labor o r other special o r temporary purposes; and t o which he [the r e s i d e n t ] returns i n seasons of repose'. " 'While the word "residence" has been involved i n many controversies 9; * = k it w i l l be found t h a t it i s m t the word i t s e l f t h a t has been d i f f i c u l t of understanding. It has been i n the construction of language expressive of the e f f e c t of residence, and of the r i g h t s a r i s i n g therefrom and based on the f a c t of residence. I n each such case the word becomes a p a r t of a concept larger than it- s e l f , such a s residence necessary t o the r i g h t t o vote, residence i n establishing a domicile, r e s i - dence necessary t o citizenship, e t c . t I I P l a i n t i f f s and defendant separately c i t e cases and Montana s t a t u t e s which i n some instances would include a cor- portion a s a n a t u r a l person having a place of residence (Section 19-103, R.C.M. 1947; Quaker City Cab. Co, v, Pennsylvania, 277 U.S. 389, 48 S.Ct. 553, 72 L ed 927) and at other times would not (Section 83-303, R,C.M. 1947; Pittsburg, C., C. & St.L,Ry. Co. v. City of Indianapolis, 147 Ind. 292, 46 N.E. 6 4 1 ) . Whether or not a corporation is to be considered the same as a natural person for residence purposes depends entirely upon the context of the particular statute in question. From the above discussion, it is clear that section 11-403, R.C.M. 1947, requires actual residence on the property sought to be annexed in order to qualify for protest and thus excludes a corporation which possesses no actual residence as distinquished from a legal residence for some purposes. Thus a corporation is not a "resident freeholder" within the meaning of this statute. The same reasoning applies to a partnership, likewise a legal entity with no actual residence. The final issue is whether the annexation statute, section 11-403, R.C.M, 1947, violates the Equal Protection Clause of the Fourteenth Amendment of the United States Constitution by establishing discriminatroy classifications without compelling justification. The statute allows the right of protest to resident freeholders, but not to resident nonfreeholders nor nonresident freeholders. Plaintiffs contend that several recent United States Supreme Court decisions dealing with voting rights in school districts, Kramer v . Union Free School District, 395 U,S. 621, 89 S.Ct. 1886, 23 L ed 2d 583 (1969); voting rights in bond elections, Cipriano v. City of Houma, 395 U . S . 701, 89 S.Ct. 1897, 23 L ed 2d 647 (1969); in welfare cases, Shapiro v . Thompson, 394 U.S. 618, 89 S.Ct. 1322, 22 L ed 2d 600 (1969); and other similar cases should be considered in ruling this statute discriminatory class legislation and uncon- stitutional. We note that these cases deal with the protection of the rights of "natural persons" based on their residence. The United States Supreme Court has not as yet seen fit to extend the right t o vote or collect welfare benefits t o corporate or partnership e n t i t i e s i n the absence of statute, In the instant case the protesting corporations and partnership, although their land i s subject t o taxation for school levies, special improvement d i s t r i c t s , and general taxes, have no right t o vote on such levies, Annexation is generally regarded a s a p o l i t i c a l matter exclusively for the legislature t o regulate, unless specifically restrained by the Constitution. The legislature can authorize annexation without the consent and even against the wishes of the people living i n the area t o be annexed. Harrison v. City of Missoula, 146 Mont. 420, 407 P.2d 703, The extension of the corporate l i m i t s of a c i t y i s ancillary t o governmental mainten- ance of the health, safety, general welfare, and good order of those communities which a r e formed by dense collections of citizens i n particular localities. Such i s constitutional even though the annexed t e r r i t o r y may receive no direct benefit from incorporation i n return for the municipal burdens thereby imposed upon it. 2 McQuillin M u n Corp (3rd Ed) 5 7.10, p. 309, Section 11-403, R.C.M, 1947, was f i r s t declared valid and constitutional i n Harrison v. City of Missoula, supra. In that case, the protesters claimed section 11-403, R.C.M. 1947, was "class legislation" i n that a distinction i s made between "freeholder" and "resident freeholder" and that there had been a "taking of property1' without due process. W e held otherwise. Subsequently t h i s Court upheld the constitutionality of t h i s statute i n Calvert v. City of Great Falls, supra, where the protesters challenged the legislative exemptions relating t o compulsory annexation of land devoted t o industrial and manu- facturing enterprises and similar purposes. The same result was reached by t h i s Court i n Brodie v. City of Missoula, supra. In Brodie we held that the compulsory annexation of t e r r i t o r y "wholly surrounded" by the c i t y did not violate federal or s t a t e constitu- tional provisions proscribing the taking of private property without due process of law, See also: Sailors v. Kent Board of Ed,, 387 Pittsburg, 207 U.S. 161, 28 S.Ct. 40, 52 L.ed. 151 (1907). Nore prticularly, however, plaintiffs attack the consti- tutionality of that provision in section 11-403, R.C.M. 1947, which limits protests to "resident freeholders1' in cities over 10,000 population, while in smaller cities a protester need only meet the qualification of a "freeholder" without regard to resi- dence on the property to be annexed, In Calvert this Court summarized the general rule that a statute is presumed to be constitutional in language appearing on pages 218, 219 of 154 Montana: I I In this state the presumption of constitution- I al-ity becomes specific when the claim of class legislation' is raised for much of our legisla- tion in the field of property law imposes dis- tinctions and classifications, These distinctions and classifications have been upheld whenever found to be reasonable and to operate equally upon every person or thing in a given class. State ex rel. Redman v. Meyers, 65 Mont. 124, 128. 210 P. 1064; State ex rel. Morgan v. White (Ret.Sys.), 136 Mont. 470, 348 P.2d 991." This Court, however, went on to say: 11 I The constitutional safeguard against unjust discrimination in legislation of this type is well defined by the decisions everywhere, and that is, that the classifications must be reason- able, not arbitrary, and must rest upon some ground of difference having a fair and substantial relation to the object of the legislation, so that all persons similarly circumstanced shall be treated alike. (Mills v. State Board of Equalization, 97 Xont. 13, 31, 33 P,2d 5 6 3 . ) " ' The legislature may provide at its discretion the manner of proresting and the parties privileged to protest. In fact, statutes often require the consent of only a designated proportion of the voters, or property owners in the territory to be annexed. The consent of others not so designated is immaterial, 2 1.IcQuillin Z v I u n Corp (3rd Ed) 5 7.16, p, 335. A n0nresiden.t freeholder of the annexed area may constitutionally be excluded from those per- mitted to protest. Adams v. City of Colorado Springs, 308 F.Supp. 1397, ~ff'd 399 U,S. 901, 90 S.Ct. 2197, 26 L ed 2d 555; Rogers v. City and County of Denver, 161 Colo. 72, 419 P.2d 648. There are governmental as well as economic reasons for the legislature to make annexations easier for larger cities. In hdams at p. 1404, the court said: 1 1 The metropolitan area is a single social and economic unit, yet it has no consolidated government 7k *[Annexation] permits a united approach to solving the problems and supplying the needs of the urban area, in terms of planning and rendition of service as well as fiscal bal- ance. I I Considerable differences exist between cities having a population in excess of 10,000 and those less than 10,000 popu- lation. In the instant case, ~utte's Mayor testified to some of these peculiar problems, i.e., larger cities addressing themselves to problems in the area of assistance to senior citizens, expanded youth programs, and the necessity of more sophisticated and speci- lized sewage treatment and water plants, for exam.ple. In addition, Montana statutes are full of examples where the legislature has set forth different requirements for the different classes of cities according to population. See: Title 11, R.C.M. 1947. We hold that the classifications established by the legis- lature in limiting protests to annexation to resident freeholders in first class cities, while permitting protests by freeholders without regard to residence in smaller cities is not only a rational distinction but also promotes a compelling governmental interest and is therefore constitutional. To summarize,the legislature in enacting section 11-403, R.C.M. 1947, intended to make the process of annexation easier in larger cities. Services in the larger cities are ever increasing due to various and diverse growth trends. The larger city tends to become the hub of commerce for a metropolitan area not only in terms of services for its own citizens but also for persons in its metropolitan area outside the city limits. Eventually, the two groups become virtually dependent upon one another. They become a single entity having common needs, Easier annexation permits such larger city to broaden its tax base and thus spread the costs among those who use its services. Easier annexation permits the larger city to provide these services which are essential for the health,safety, and general welfare of the entire area. For these reasons, the consolidated judgment of the district court is affirmed. Associate Justice