No. 12312 INTHE SUPREME COURT OF THE STATE OF 1VIONTANA 1973

KENNETH Re BURRITT, d/b/a BURRITT ANIMAL HOSPITAL, E & L REAL ESTATE COMPANY, INC., a Montana corporation, BUTTE PLAZA, INC., a corporation, and ROMNEY INTERNATIONAL HOTEL, INC.

## ,a Delaware Corporation, Plaintiffs and Appellants,

CITY OF BUTTE, A Municipal corporation, Defendant and Respondent.

-s%-.".------- SAFEWAY STORES, INC., et al, Plaintiffs and Appellants,

-vs

# - / CITY OF BUTTE, A Municipal corporation, Defendant and Respondent.

Appeal from: District Court of theSecond Judicial District, 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

:

## MAR26

## 1973 Filed:

## M&R26

## 1973

&@@-+ ClerkMr. JusticeFrank I, Haswell delivered the Opinion of the Court.
This 

### is an appealby four property owners and two lessees of part of their property from ajudgment of the district court of SilverBow County, theHon. Nat Allen, districtjudge presiding, validating the annexation of their property intothe city limits of Butte, Montana. From 

### a consolidated judgment intwo cases denying their applications for a writof prohibition against the City of Butte toprevent annexation, the property owners and their lessees appeal. For simplicity of identification, 

### we shall refer to plaintiffs asBurritt, Romney Hotels, E & L Real Estate, Butte Plaza, Safeway, and Third Wallingford, respectively, Defendant City of Butte willbe referred toas the City. Three of the four landowners of the annexed property are corporations, being Romney Hotels, E & L Real Estate, and Third Wallingford. The fourth landowner 

### is a privateperson, Burritt, operating an animal hospitalbut not residing inthe annexed area. Plaintiffs Butte Plaza and Safeway are lessees of a portion of the annexed property from E & L Real Estate and Third Wallingford, respectively. Two separate suitswere filed contesting the annexationwhich
were subsequently consolidated. The district court made the following findings of fact which were not disputed. The land owned by E & L Real Estate isleased by Butte Plaza, a partnership, and used as a typical retail shopping centerwhich includes a grocery store, drug store, real estate office, tavern, restaurant, department store, barber shop, fabric store, shoe store, variety store, and a movie theater. The land owned by Romney Hotels isused as 

### a motel with a restaurant, bar, and a gas station located thereon. The land owned by Third Wallingford is leased to Safeway and used
as a retail grocery storecontaining an in-store bakery and meat counter. The land owned by Burritt isused for a veterinary office and animal hospital.Plaintiffs excepted only toFindings XI11and XIV, which stated in substance that none of the plaintiffs areresident freeholders of the property sought tobe annexed and thatnone of the land annexed was used for industrial ormanufacturing purposes, within the meaning of section 11-403, R.C.M, 1947. Plaintiffs do not raiseupon this appeal any objections regarding the procedure followed by the City inthe annexation, Therefore, we shallconsider that the City followed the statutory procedure for annexation as set forth in section 11-403, R.C.M. 1947. From the district court's judgment quashing the alternativewrits of prohibition previously issued and dismissing the consolidated action, plaintiffsnow appeal. The issues presented forreview may be summarized: (1) Is any of the annexed land used for industrial or manufacturing purposes within the meaning of section 11-403, R..C.M. 1947? (2) Are any of the plaintiffs resident freeholders of the annexed properties? (3) Does section 11-403, R.C.M. 1947, establish discriminatory classificationswithout compelling justification inviolation of the Equal Protection Clause of the Fourteenth Amendment to the United States Constitution? Plaintiffs contend initiallythat the annexed land was used for "industrial purposes" within the meaning of section 11-403(1), R.C.M. 1947, thereby requiring written consent of the landowners for annexation intothe city. This limitationwas added by the legislature in 1961. The Court's function istoconstrue the language of the statute inaccordance with itsusual and ordinary acceptance, with a view to giving vitality toand making operative allprovisions of the law and accomplishing the intention of the legislaturewhen ascertainable. Section 93-401-16, R.C.M. 1947; County of Hillv. County of Liberty, 62 Mont. 15, 203 P. 500. Interpreting section 11-403, R.C.M. 1947, in

### its entirety it is 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 includewhat are generally termed commercial,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---wouldbe within the definition of "industrial purpose". Plaintiffs' expertwitness, an economist,gave a technicaldefinition 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 department 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 effectivelyblock any annexation attemptwhere 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, 

### 7Mont. 

### 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 statutehere so Carver is 

### readily distinguishable. The goal of statutory interpretations 

### is to give effect to the 

### purpose of the statute. County of Hillv. County of Liberty, supra. To give effect to the purpose of the statute

### as intendedby the legislature,the context inwhich thewords
are used ismore important than precise grammatical rules or a dictionary definition. Home Bldg, & 

### Loanv. Bd. of Equalization, 

### 141Mont. 113, 375 P.2d 312. For the purposes of section 11-403,R.C.M. 1947,we adopt
a more limited definition of industrialpurpose. "Industrial purpose" is limited to any factory, business or concernwhich is engaged primarily in the manufacture or assembly of goods or processing of rawmaterials unserviceable in their natural statewhich 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 classificationand defining "new industrial"business forpurpose of taxation. Section 84-301,R.C.M. 1947. This section specifically excludesproperty used by retail orwholesale merchants, commercial services of any type,agriculture, trades, or professions. That statutory classificationwas enacted by the Montana legislature in 1961, the sameyear the "industrial and manufacturing" clausewas added to section 11-403,R.C.M, 1947.

11 

### In addition, the distinction made between commercial" and "industrial" in Calvert v. City of Great Falls, 154Mont. 213, 462 P.2d 182, leads us tobelieve 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-storebakery and meat market
aremerely incidental to the operation of Safeway's principal business on the premises, a retail grocery. Under the foregoing definition of industrialwhichwehave adopted in this case, these incidental operationsdo 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 iswhether the definition of

If

resident freeholder" under section 11-403, R.C.M. 1947, includes a corporation, This section provides inpertinent part:

11J; -1- 

# - that such resolution [of annexation] shall not be adopted by such council if disapproved, in writing, by a majority of the resident freeholders, ifany of the territory proposed tobe embraced -/c ik

# *
In Kunesh v. City of Great Falls, 132 Mont. 285, 317 P.2d 297, this Court defined "resident freeholder" for the purposes of this section as one who 

### is a resident within the area tobe annexed, holding a present legal titletoa freehold estate in real property located within the area tobe annexed, Such definition was reaffirmed inBrodie v, City of I\lissoula, 155 Mont. 

### 1-85, 468 P.2d 778. Neither casehowever, deals with the specific problem of the residence of a corporation. Section 11-403, R.C.M. 1947, provides that the protesters must live inthe area to be annexed and have a freehold interest in land in the area. In the instant case, four of the plaintiffs

are corporations, one is a partnership, and one 

### is a natural person,In Ihnesh atpages 289,290 of 132 Mont,, this Court discussed the requirements of "residence" at length: "Residence has been defined as the place where a man makes hishome 9; ;? and that residence 

# '* 9; J: is the placewhere one remains when not called elsewhere for labor or other special or temporary purposes; and towhich he [theresident] returns in seasons of repose'. 

## "'While theword "residence" has been involved in many controversies 9;

# * =k itwillbe found that it ismttheword itself that has been difficult of understanding. It has been in the construction of language expressive of the effect of residence, and of the rights arising therefrom and based on the fact of residence. In each such case the word becomes a part of a concept larger than itself, such asresidence necessary to the right to vote, residence inestablishing a domicile, residence necessary tocitizenship, etc. t II Plaintiffs and defendant separatelycitecases and Montana statuteswhich in some instanceswould include a corportion as a natural 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, 46N.E. 641). 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 corporationwhich 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 entitywith 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 FourteenthAmendment of the United States Constitutionby establishing discriminatroy classifications without compelling justification. The statuteallowsthe right of protest to resident freeholders,but not to resident nonfreeholders nor nonresident freeholders. Plaintiffs contend that several recent United States Supreme Court decisions dealingwith 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,Ciprianov. City of Houma, 395 U.S. 701, 89 S.Ct. 1897, 23 

### L ed 2d 647 (1969); inwelfare cases, Shapirov. Thompson, 394

### U.S. 618,89 S.Ct. 1322, 22 

### L ed 2d 600 (1969); and other similar cases shouldbe 

### considered in ruling this statute discriminatoryclass legislation and unconstitutional. We note that these cases dealwith 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 righttovote or collectwelfarebenefits to corporate or partnership entities in the absence of statute, In the instant case the protesting corporations and partnership, although their land 

### is subject to taxation for school levies, special improvement districts, and general taxes, have no right tovote on such levies, Annexation 

### is generally regarded as a political matter exclusively for the legislature toregulate, unless specifically restrained by the Constitution. The legislature can authorize annexation without the consent and even against thewishes of the people living in the area tobe annexed. Harrison v. City of Missoula, 146 Mont. 420, 407 P.2d 703, The extension of the corporate limitsof a city isancillary to governmental maintenance of the health, safety, general welfare, and good order of those communities which are formed by dense collections of citizens inparticular localities. Such 

### is constitutional even though the annexed territorymay receive no directbenefit from incorporation inreturn for the municipal burdens thereby imposed upon it. 2McQuillinMun Corp (3rd Ed) 

### 5 7.10, p. 309, Section 11-403, R.C.M, 1947, was first declared valid and constitutional inHarrison v. City of Missoula, supra. In that case, the protesters claimed section 11-403, R.C.M. 1947,
was "class legislation" inthat a distinction 

### ismade between "freeholder" and "resident freeholder" and that therehad been

a "taking of property1' without due process. We held otherwise. Subsequently this Court upheld the constitutionality of this statute inCalvert v. City of Great Falls, supra, where the protesters challenged the legislative exemptions relating to compulsory annexation of land devoted to industrial and manufacturing enterprises and similar purposes. The same result was reached by this Court inBrodie v. City of Missoula, supra. In Brodie we held that the compulsory annexation of territory "wholly surrounded" by the citydid not violate federal or stateconstitutional provisions proscribing the taking of private property without due process of law, See also: Sailorsv. Kent Board of Ed,, 387

### Pittsburg, 207 U.S. 161, 28 S.Ct. 40, 52L.ed. 151 (1907). Noreprticularly, 

### however, plaintiffs attack the constitutionality 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 residence 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 154Montana:

I I

### In this state the presumption of constitutionI 

### al-itybecomes specificwhen the claim of class legislation' is raised for much of our legislation in the field of property law imposes distinctions and classifications, These distinctions and classificationshave been upheld whenever found to be reasonableand 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.), 136Mont. 470, 348 P.2d 991." 

### This Court, however,went on to say:

11I

### The constitutional safeguard against unjust discrimination in legislation of this type is well defined by the decisions everywhere,and that is, that the classificationsmust be reasonable,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 shallbe treated alike. (Mills v. State Board of Equalization, 97 Xont. 13, 31, 33 P,2d 563.)"' 

### The legislaturemay 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 othersnot so designated is immaterial, 2 1.IcQuillin ZvIun Corp (3rd Ed) 5 

### 7.16, p, 335. 

### A n0nresiden.tfreeholder of the 

### annexed area may constitutionallybe excluded from those permitted 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, 161Colo. 72, 419 P.2d 648.

### There are governmentalaswell as economic reasons for the legislature to make annexations easier for larger cities. In hdams at p. 1404, the court said:

11



### 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 aswell as fiscalbalance.I I 

### Considerable differences exist between cities having a population in excess of 10,000 and those less than 10,000 population. In the instant case, ~utte'sMayor testified to some of these peculiar problems, i.e., larger cities addressing themselves to problems in the area of assistance to senior citizens,expanded youthprograms, and the necessity of more sophisticated and specilized sewage treatment and water plants, for exam.ple. In addition,Montana statutes are full of examples where the 

### legislaturehas 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 legislature 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 citizensbut 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 entityhaving common needs, Easier annexation permits such larger city to broaden its tax baseand 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