Case Name: ALCO UNIVERSAL INCORPORATED v. CITY OF FLINT
Court: Michigan Supreme Court
Jurisdiction: Michigan
Decision Date: 1971-12-21
Citations: 386 Mich. 359
Docket Number: No. 42; Docket No. 52,777
Parties: ALCO UNIVERSAL INCORPORATED v. CITY OF FLINT
Judges: T. M. Kavanagh, C. J., and Black, T. E. Bkennan, and Swainson, JJ., concurred with Williams, J.
Reporter: Michigan Reports
Volume: 386
Pages: 359–375

Head Matter:
ALCO UNIVERSAL INCORPORATED v. CITY OF FLINT
Opinion op the Court
1. Words and Phrases—Approve—Government Action.
The normal meaning of “approve” with relation to government action implies the power to disapprove.
2. Municipal Corporations—Housing Commission—Statutes.
Section of the municipal housing facilities act providing that “All deeds, contracts, leases, or purchases entered into by the commission shall be in the name of the city or village and shall be approved by the governing body of said city or village” does not mean that the legislature thought the city commission should rubber stamp the transactions described (MCLA § 125.661).
3. Municipal Corporations—Home Rule—Constitutional Law— Statutes—Construction.
The dignity and power of a city commission cannot be lightly construed away as Michigan is a strong home-rule state; the Michigan constitution recognizes basic local authority and legislation grants liberal powers (Const 1963, art 2, § 22: MCLA § 117.4j).
References for Points in Headnotes
[1] 56 Am Jur 2d, Municipal Corporations, Counties, and Other Political Subdivisions, § 151 et seq.
56 Am Jur 2d, Municipal Corporations, Counties, and Other Political Subdivisions, § 337 et seq.
4. Municipal Corporations—Housing Commission—Deeds—Contracts—Leases—Statutes.
The legislature reserved the right to and imposed the duty of approval of all deeds, contracts, leases or purchases entered into by a Housing Commission upon the City Commission; to do otherwise would be to give the Housing Commisison a book of blank checks to write against the good name of the city (MCLA § 125.661).
5. Municipal Corporations—Housing Commission—Statutes—Discretion—Deeds—Contracts—Leases.
The legislature by word and intention provided that a city commission has the authority and responsibility to exercise its discretion in approving transactions of the nature described in a section of the municipal housing facilities act which provides that “All deeds, contracts, leases, or purchases entered into by the commission shall be in the name of the city or village and shall be approved by the governing body of said city or village” (MCLA § 125.661) .
Dissenting Opinion
Adams and T. O. Kavanagh, JJ.
6. Municipal Corporations—Housing Project Contracts—Ministerial Duty.
A city’s approval of housing project contracts entered into by a housing commission is a ministerial duty requiring no exercise of discretion.
7. Municipal Corporations—Housing Commissions—Statutes.
Powers of housing commissions and their relationship wilh municipal governing bodies are found in and controlled by the state enabling legislation.
8. Municipal Corporations—Ministerial Act—Housing.
The language “shall be approved by the governing body”, which appears in a section of the municipal housing facilities statute, requires only a ministerial act (MCLA § 126.661).
Appeal from Genesee, John W. Baker, J., and from Court of Appeals prior to decision.
Submitted September 15, 1971.
(No. 42
June Term 1971,
Docket No. 52,777.)
Decided December 21, 1971.
Complaint by Alco Universal Incorporated against the City of Flint, the Flint City Commission, Commissioners of the Flint City Commission and the Flint Housing Commission for a writ of mandamus to compel approval of contracts and for an injunction restraining defendants from granting any project adopted by the Flint Housing Commission. Writ granted. Defendants appealed to the Court of Appeals. Plaintiff applied to the Supreme Court for leave to appeal prior to decision by the Court of Appeals. Leave granted.
Reversed.
Farhat <& Burns (by Michael F. Cavanagh), for plaintiff.
Robert E. Weiss and Edward H. Devoe, for defendants.
Amicus Curiae: Center for Urban Law and Housing, Wayne County Neighborhood Legal Services, by Edward C. King, Michael G. Barnhart, Michael B. Bixby, and James W. Sisk, Jr.

Opinion:
Williams, J.
My Brother Justice Thomas G. Kavanagh correctly observes the decision in this case turns on the construction of § 11 of the municipal housing facilities act, PA 1933 (Ex Sess), No 18, §11 (MCLA § 125.661; Stat Ann 1969 Rev § 5.3021); §11 provides:
"All deeds, contracts, leases, or purchases entered into by the commission shall be in the name of the city or village and shall be approved by the governing body of said city or village. Contracts for the purchase of necessary materials, leases with tenants and options need not be so approved."
The Flint Housing Commission had been duly authorized and organized pursuant to the municipal housing facilities act. As far as this case goes, the Housing Commission had processed through the Federal Government and had taken other steps with respect to a proposal plaintiff had submitted to construct a turn-key project.
The issue engendering this case arose when the Housing Commission submitted to the City Commission certain contracts to help the Housing Commission carry out steps it had to take to be in a position to bring the proposal to fruition and the City Commission voted to drop the project without giving any reason.
The issue revolves around an interpretation of "shall be approved". Does this mean, as plaintiff contends, that the city must automatically "rubber stamp" the Housing Commission's desired action? Or does it mean, as the City Commission contends, that the city must exercise its discretion and approve or disapprove?
The normal meaning of "approve" with relation to government action implies the power to disapprove. For example, the language "shall be approved by the local legislative body" in § 17 of The Michigan Liquor Control Act, MCLA § 436.17 (Stat Ann 1971 Rev § 18.988), is recognized as requiring exercise of discretion. Lewis v. Grand Rapids (CA6, 1966), 356 F2d 276, 285 et seq.; cert den (1966), 385 US 838 (87 S Ct 84, 17 L Ed 2d 71). See generally 6 CJS 127 "Approve" and "Approved" : discretion not necessarily implied but normally is. ;
Furthermore, § 11 of the municipal housing facilities act clearly suggests that with respect to certain lesser transactions it is not going to bother the City Council ("Contracts for the purchase of necessary materials, leases with tenants and options need not be so approved"). However, with respect to "All deeds, contracts, leases, or purchases entered into by the commission", the Michigan legislature specifies, "shall be in the name of the city or village and shall be approved by the governing body of said city or village".
Does this mean the legislature thought the City Commission should rubber stamp the transactions described in the first sentence but did not have to be bothered with the second?
We do not think so.
The Michigan municipal housing facilities act is quite different from those in California, Montana and New Jersey concerning which my brother Justice Thomas G. Kavanagh quotes Court decisions. In fact, counsel for the City Commission claims in many respects the Michigan legislation is sui generis. Whether that is true or not, the three jurisdictions relied on by my brother do seem to be part of a pattern from which Michigan is quite distinct.
Michigan is a strong home-rule state. Our constitution recognizes basic local authority. Const 1963, art 7, § 22. Legislation grants liberal powers. MCLA § 117.4j (Stat Ann 1949 Rev § 5.2083); Conroy v. Battle Creek, (1946), 314 Mich 210, 221. The dignity and power of a city commission cannot be lightly construed away.
In addition to leaving the power to approve certain important transactions under the power of the City Commission in § 11, the legislature also left the power of eminent domain in the City Commission under § 10.
A significant reason for all of this becomes evident in tying together the first part of the first sentence of § 11 with other parts of the municipal housing facilities act. The critical words are "All deeds, contracts, leases or purchases entered into by the commission shall he in the name of the city ." (Emphasis added.)
The purpose behind all this becomes clear when examined in the light of later sections which make clear that revenue bonds to finance the housing projects are issued in the name of the city, not the Housing Commission (§§16, 17.) The city also has the power to borrow money to develop housing projects. (§§47, 48.) In other words the legislature wanted to increase the saleability of housing revenue bonds by having them issued in the name of the city and likewise improve the credit of the obligor on the important transaction contracts specified in the first sentence of § 11 by involving the city itself. This is why the legislature reserved the right to and imposed the duty of approval upon the City Commission. To do otherwise would be to give the Housing Commission a book of blank checks to write against the good name of the city.
In California, Montana and New Jersey the Housing Commissions have considerably more authority than in Michigan. Por example, in California, Montana, and New Jersey the commissioners can be dismissed only for misconduct after notice and hearing (41A West's Cal Code Ann § 34282; 3 RCM 35-108; NJSA 55:14A-6). In Michigan the commissioners may at any time be removed by the appointing authority.
More to the point, in California the Housing Authority may contract for services (41A West's Cal Code Ann § 34314) and may "(C) Purchase, lease, obtain option upon, acquire by gift, grant, bequest, devise, or otherwise any real or personal property or any interest in property." (Id, § 34315.) The same is essentially true in Montana (3 RCM 35-109) and in New Jersey (NJSA 55: 14A-7 [c] and [d]).
California, Montana and New Jersey commissioners have the right of eminent domain and to issue their own bonds (41A West's Cal Code Ann § 34325 and § 34350; 3 RCM 35-109, 35-111 and 35-114; NJSA 55.44A-10 and 5544A-12).
As already indicated because of difference in statutory authority the cases of Housing Authority v. Los Angeles (1952), 38 Cal 2d 853 (243 P2d 515), State ex rel. Great Falls Housing Authority v. Great Falls (1940), 110 Mont 318 (100 P2d 915), and City of Paterson v. Housing Authority of Paterson (1967), 96 NJ Super 394 (233 A2d 98) are distinguished. In some, other facts as well are different as in the Los Angeles case the city had already approved the contract once.
The legislature by word and intention provided that the City Commission has the authority and responsibility to exercise its discretion in approving transactions of the nature described in the first sentence of § 11. The Housing Commission was granted by the legislature broad powers to construct, maintain, and operate housing projects without supervision. Sections 27, 44, 44b among others. But the legislature did reserve to the City Commission certain responsibilities, and authority, one segment of which (§ 11) was in question here.
Answering the ringing words of Franklin Delano Roosevelt "I see one-third of the nation ill-housed, ill-clad and ill-nourished" the Michigan legislature in its wisdom provided this method to meet the crying human need of low cost housing. It is clear that they assumed that those elected by the people to represent them would be the most solicitous and most concerned about their welfare, and being nearest the people would exercise their judgment with understanding and compassion. Furthermore, where the representatives of the people in a democracy are untrue to their trust, then the people have the sacred right to substitute those who will.
The trial court is reversed. Mandamus does not lie.
T. M. Kavanagh, C. J., and Black, T. E. Bkennan, and Swainson, JJ., concurred with Williams, J.