Case Name: Leonard WRING, Vernon Ward, James Padgett, Arthur Hardy, Henry Rudln and James A. Davis, Respondents, v. CITY OF JEFFERSON, Missouri, John G. Christy, Mayor of the City of Jefferson, Missouri, Interco incorporated, Stern Brothers & Co. and Glore Forgan, Wm. R. Staats, Inc., Appellants
Court: Supreme Court of Missouri
Jurisdiction: Missouri
Decision Date: 1967-03-13
Citations: 413 S.W.2d 292
Docket Number: No. 52445
Parties: Leonard WRING, Vernon Ward, James Padgett, Arthur Hardy, Henry Rudln and James A. Davis, Respondents, v. CITY OF JEFFERSON, Missouri, John G. Christy, Mayor of the City of Jefferson, Missouri, Interco incorporated, Stern Brothers & Co. and Glore Forgan, Wm. R. Staats, Inc., Appellants.
Judges: HOLMAN, HENLEY and SEILER, JJ., concur.
Reporter: South Western Reporter Second Series
Volume: 413
Pages: 292–310

Head Matter:
Leonard WRING, Vernon Ward, James Padgett, Arthur Hardy, Henry Rudln and James A. Davis, Respondents, v. CITY OF JEFFERSON, Missouri, John G. Christy, Mayor of the City of Jefferson, Missouri, Interco incorporated, Stern Brothers & Co. and Glore Forgan, Wm. R. Staats, Inc., Appellants.
No. 52445.
Supreme Court of Missouri, En Banc.
March 13, 1967.
Rehearing Denied April 10, 1967.
Finch, Eager and Donnelly, JJ., dissented.
Harold Gruenberg, J. F. Souders, St. Louis, for respondents, Gruenberg, Schobel & Souders, St. Louis, of counsel.
Thomas P. Rose, City Atty., Jefferson, for appellants City of Jefferson, and John G. Christy, Mayor.
Robert B. Fizzell, Jr., Jerry T. Powell, Richard E. Petrie, Stinson, Mag, Thomson, McEvers & Fizzell, Kansas City, Henry P. Andrae, Alex G. Bartlett, Hendren & And-rae, Jefferson City, William H. Armstrong, Armstrong, Teasdale, Kramer & Vaughan, St. Louis, for appellants Interco Inc., Stern Bros. & Co. and Glore Forgan, Wm. R. Staats, Inc.
Norman H. Anderson, Atty. Gen., C. B. Burns, Jr., Asst. Atty. Gen., Jefferson City, amicus curiae.
Amos Wight, City Counselor, City of Nevada, amicus curiae.

Opinion:
STORCKMAN, Chief Justice.
This is a suit for an injunction to restrain the City of Jefferson from carrying out a project of industrial development undertaken pursuant to § 27, Art. 6, of the Constitution of Missouri, 1945, as amended November 8, 1960, V.A.M.S., and August 17, 1965, and § 71.790 to 71.850, RSMo 1965 Cum.Supp., V.A.M.S. The trial court issued the injunction and the City and other defendants have appealed. The questions presented on appeal are whether the City is lawfully authorized to sell the proposed industrial plant to Interco Incorporated, whether the City is required to let the contract for the construction of the industrial plant, and whether the proposed lease of the plant grants Interco immunity from taxation.
The facts of the case are not in dispute. The evidence on the more essential features is documentary and other evidence relates largely to the identity and status of the plaintiffs. At a special election held June 14, 1966, in the City of Jefferson, better known as Jefferson City, the following proposal was approved by a vote of 2732 to 86:
"Proposition to issue the industrial revenue bonds of the City of Jefferson, Missouri, to the amount of $8,500,000 for the purpose of purchasing and constructing an industrial plant to be leased to Interco Incorporated, a Delaware corporation, for manufacturing and industrial development purposes, including real estate, buildings, fixtures and machinery, said bonds to be payable solely from the revenues derived from a project for industrial development and not to be a general obligation of said City."
The City Council had adopted a resolution approving the project on May 16, 1966. An application was made to the Division of Commerce and Industrial Development of th/e State of Missouri in accordance with the/requirements of § 71.803, 71.807 and 71.810, RSMo, Cum.Supp.1961, V.A.M.S. The Industrial Development Commission of the Division approved the plan of industrial development, first on May 20, 1966, as the result of a telephone and mail ballot, and thereafter by formal approval given at a meeting held in St. Louis on July 12, 1966.
The City and Interco propose to enter into an agreement providing in essence that the proceeds of the $8,500,000 revenue bonds will be used to pay the cost of constructing an industrial plant in Jefferson City which will be known as the International Shoe Company Distribution Center and which will be responsible for the distribution of shoes throughout the United States. The City will lease the industrial plant to In-terco, Inc., at rentals sufficient to retire the bonds as they become due and to pay the interest thereon. The bonds will be payable •only from rentals due under the lease and the City has no obligation or authority to levy taxes to pay principal or interest on the bonds. The City has entered into a contract to sell the bonds to the defendants, Stern Brothers & Co. and Glore Forgan, Wm. R. Staats, Inc., investment bankers of Kansas City and Chicago, respectively. The basic term of the lease is twenty-five years and six months. The lease grants Interco an option to purchase the industrial plant upon payment of the principal and interest due on all outstanding bonds and the sum of one dollar to the City. Other pertinent provisions of the lease will be discussed in connection with the questions presented. When the plant in Jefferson City becomes •operative, which is estimated to be sometime in 1968, Interco proposes to close its warehouse in the City of St. Louis. Inter-co, in accordance with its agreement, paid all the costs and expenses of the election held in Jefferson City, at which the issue of revenue bonds was approved.
On July 8, 1966, the plaintiffs filed in the Circuit Court of Cole County their petition to enjoin the consummation of the project described. The plaintiff James A. Davis is a resident, a registered voter and a taxpayer of the City of Jefferson. The defendant City owns the land upon which the warehouse is to be constructed. The right of the City to dispose of the industrial plant including the land, the building to be constructed thereon and the machinery and equipment to be purchased is in controversy. In these circumstances the plaintiff Davis is qualified to maintain the action. Hight v. City of Harrisonville, 328 Mo. 549, 41 S.W.2d 155, 158 [1]; 64 C.J.S. Municipal Corporations § 2152.
On August 15, 1966, the trial court entered its judgment and decree dismissing the petition with respect to the members of the Industrial Development Commission of the Division of Commerce and Industrial Development. The judgment and decree restrained and enjoined the defendants City of Jefferson, Mayor Christy, and Interco, Incorporated, from entering into or giving effect to the proposed lease between the City and Interco, and restrained and enjoined the City, Mayor Christy, Stern Brothers & Co., and Glore Forgan, Wm. R. Staats, Inc., from issuing, or purchasing or arranging for the sale of the $8,500,000 issue of industrial bonds.
The attorney general of Missouri represented the members of the Industrial Development Commission until they were dismissed from the case by the trial court. After the appeal was taken the attorney general applied to this court and was granted leave to file a brief as amicus curiae which we have before us in addition to the briefs of the parties.
The first issue presented is whether the City is authorized to sell the proposed industrial plant to Interco in accordance with the option granted by the lease, particularly Article XVII. The constitutional authority on which this project is based is § 27 of Art. 6 of the Missouri Constitution, which at the relevant time was constituted as follows:
"Section 27. Any city or incorporated town or village in this state, by vote of four-sevenths of the qualified electors thereof voting thereon, may issue and sell its negotiable interest bearing revenue bonds for the purpose of paying all or part of the cost of purchasing, constructing, extending or improving any of the following: (1) revenue producing water, gas or electric light works, heating or power plants; [ (2) plants to be leased or otherwise disposed of pursuant to law to private persons or corporations for manufacturing and industrial development purposes, including the real estate, buildings, fixtures and machinery;] or (3) airports; to be owned exclusively by the municipality, the cost of operation and maintenance and the principal and interest of the bonds to be payable solely from the revenues derived by the municipality from the operation of the utility [or the lease of the plant.]" Brackets and italics added.
Section 27 of Art. 6 relating to revenue bonds was new in the 1945 Constitution and except for changes in form and punctuation, its original content was the same as that part of § 27 set out above which is not enclosed by brackets; in other words, it related to traditional municipal functions such as water, gas and electric light works. At the general election on November 8, 1960, a constitutional amendment, Proposition No. 4, relating to industrial development plants, was adopted; this added a new section, No. 23(a), to Art. 6, and made certain amendments to § 27.
The new section, 23(a), relates to general obligations of a city, incorporated town or village having less than 400,000 inhabitants and so far as pertinent to the present inquiry provided that such municipality "may become indebted for and may purchase, construct, extend or improve plants to be leased or otherwise disposed of pursuant to law to private persons or corporations for manufacturing and industrial development purposes, including the real estate, buildings, fixtures and machinery". At the same time, § 27 of Art. 6 was amended by including industrial plants as a new subject for which revenue bonds could be issued. This amendment to § 27 consisted of the part included in brackets except the words that are italicized. See Laws 1959, pp. 10a-lla, House Joint Resolution No. 11, § 1 and 2. By another constitutional amendment adopted August 17, 1965, the words italicized consisting of "or otherwise disposed of pursuant to law" were added to § 27 as heretofore set out and designated. RSMol965, Cum.Supp., § 27, p. 28; Laws 1965, House Joint Resolution No. 11. Thus, the Missouri Constitution conferred on municipalities the power and authority to purchase, construct, extend or improve plants for manufacturing and industrial development purposes. By virtue of § 23(a), these projects could be financed by the issuance of general obligation bonds; under § 27 revenue bonds could be issued. Both 23(a) and 27 at the time the instant project was initiated provided in identical language that such plants could be "leased or otherwise disposed of pursuant to law".
Sections 71.790 to 71.850, RSMo, V.A.M.S., relating to industrial development by municipalities, were enacted in 1961 to implement the grant of power conferred on municipalities by § 23(a) and 27 of Art. 6. RSMo, Cum.Supp. Both of these sections of the Constitution insofar as they relate to industrial development projects have been held not to be completely self-enforcing. State ex rel. City of Fulton v. Smith, 355 Mo. 27, 194 S.W.2d 302, 304 [3] ; State ex rel. City of Charleston v. Holman, Mo., 355 S.W.2d 946, 949-950; Petition of Monroe City, Mo., 359 S.W.2d 706, 710-711. The plaintiffs contend that statutory authority is necessary to validate the sale of an industrial plant financed by the proceeds of revenue bonds and that none exists. They point out that § 71.850 which states that any municipality "may sell or otherwise dispose of" industrial plants refers specifically to those acquired with the proceeds from the sale of general obligation bonds.
In support of this contention, the plaintiff's point out that § 71.820 and 71.847 require that a lease of industrial property acquired with the proceeds from the sale of revenue bonds shall be consistent with the provisions of the entire series of statutes numbered 71.790 through 71.8S0. The latter section referring specifically to general obligation bonds requires the sale or other disposition to be "upon approval by the division of commerce and industrial development" and further sets out this general standard and requirement: "The terms and method of the sale or other disposal shall be established by the division so as to reasonably protect and promote the economic well-being and the industrial development of the municipality." It could as plausibly be argued that § 71.820 and 71.847 incorporate by reference industrial revenue bonds as well as general obligation bonds within the coverage of § 71.850, but the decision need not rest on that ground alone because there is independent constitutional and statutory authority for the sale by a municipality of a facility acquired with the proceeds of industrial revenue bonds.
Section 77.010 provides that cities of the third class, such as Jefferson City, "may purchase, hold, lease, sell or otherwise dispose of any property, real or personal, it now owns or may hereafter acquire." This legislative authorization is germane absent some statutory or constitutional provision expressly prohibiting its application. The term "pursuant to law" is broad enough to include appropriate existing law as well as laws subsequently enacted. See State ex rel. City of Fulton v. Smith, 355 Mo. 27, 194 S.W.2d 302, 304-305 [2-4], where utility revenue bonds approved in accordance with existing statutes were held to be properly issued under § 27 of Art. 6 although registration of such bonds with the state auditor could not be compelled. Section 71.790 through 71.850 do not purport to forbid the application of § 77.010, although they regulate the methods and procedures under which the power regarding the sale of industrial plants may be exercised. These statutes provide that the plan must be approved by the Division of Commerce and Industrial Development under the legislative standards established, and that the project be carried out in accordance with the plan approved unless changed with the consent of the Division.
The first eight in the series of statutes, § 71.790 through 71.813, are of general application and provide the conditions under which municipalities must proceed and the standards by which the Division of Commerce and Industrial Development shall approve a plan submitted by a municipality. Section 71.803 among other things provides that the plan shall include: "(4) A statement of the terms upon which the facilities to be provided by the project are to be leased or otherwise disposed of by the municipality". Italics added. This disposition other than by leasing must be held to apply to facilities financed by revenue bonds as well as by general obligation bonds. The Division is directed by § 71.807 to approve the plan containing this as well as other proper provisions if it finds that the project: "(1) Will further the economic development of, and employment in, the municipality and the state; (2) Will further the general welfare of the municipality and the state; and (3) Is economically feasible and will not become a burden to the taxpayers of the municipality." The plan submitted by Jefferson City and approved by the Division contained an option for purchase as a part of the lease to Interco.
Furthermore, the Constitution directly confers on the municipality the power to sell industrial plants financed by revenue bonds subject to appropriate statutory provisions safeguarding the exercise of the power. In State ex rel. City of El Dorado Springs v. Holman, Mo., 363 S.W.2d 552, 559[7], this court held that the term "plants to be leased or otherwise disposed of pursuant to law" as contained in § 23(a) of Art. 6 of the Constitution authorized a sale of the industrial plant. The El Dorado Springs case was decided in 1962 and the plaintiffs attach importance to the fact that § 71.850 was not thereafter amended to include revenue bonds expressly. This could have been done, but it was quite unnecessary because § 27 of Art. 6 was amended on August 17, 1965, by adding after "leased" the words "or otherwise disposed of pursuant to law" thereby harmonizing that provision completely with § 23(a) of Art. 6, which the El Dorado Springs case holds "comprehends and sanctions a sale" of an industrial plant. 363 S.W.2d loe. cit. 559. The identical language in § 27 used in the same context as in § 23(a) must be given the same meaning. An amendment of § 71.850 to mention revenue bonds specifically would have added nothing to the efficacy of the power to sell granted by the Constitution.
We hold that the City was empowered by § 27 of Art. 6, as well as by statutes, to grant Interco the option to purchase under the plan approved by the Division of Commerce and Industrial Development.
A more troublesome question is whether the City is obliged by statutory law to become a party directly to the contract for the construction of the industrial plant and to let the contract to the lowest and best bidder. First it will be helpful to become acquainted with the extent and nature of the City's participation as provided by the lease agreement.
Article IV of the lease deals with the means by which the building will be erected and the machinery and equipment installed. In essence it provides that Interco shall construct the buildings and improvements on the land in accordance with the plans and specifications approved in writing by the City; that all contracts with contractors must likewise be approved by the City; that complete insurance coverage must be provided and a performance bond supplied; that Interco warrants that the buildings and improvements will result in a facility suitable for use by it; that changes in the plans may not be made without prior written approval of the City; that the City will pay for the construction of the buildings and improvements solely from the Construction Fund; that the City authorizes the fiscal agent to pay for the construction solely out of the Construction Fund from time to time upon receipt by the fiscal agent of a certificate signed by Interco and the architect. The plaintiffs say that such provisions of the lease are in violation of § 71.840, 71.-843 and 71.847.
Sections 71.840 and 71.847 contain language which the plaintiffs contend indicates a legislative intention that an industrial plant must be erected under construction contracts executed by the municipality. Section 71.840 provides generally that when the funds have been received "the municipality shall purchase, construct, extend or improve the facilities as provided by the plan." This section at least requires adherence to the approved plan. Section 71.847 provides that the municipality shall have the authority to lease "the facilities purchased, constructed or extended by the municipality" and that the terms of the lease "shall be consistent with the other provisions of sections 71.790 to 71.850." The plaintiffs assert that these two statutes as well as § 71.843, which will be treated later, "require that construction contracts for such purpose be entered into by City and such contracts may be let by the City only after notice of letting and only upon competitive bidding."
At this point it may be well to note that the completed facility will consist of about 40 acres of land, the building, and certain machinery and equipment. The term purchase would at least properly apply to the land and the machinery and equipment. The term construction would apply to the erection of the building. Hence, it was entirely proper to say as was stated in the proposal submitted to the voters that the revenue bonds were to be issued for the purpose of purchasing and constructing an industrial plant, and as was stated in similar terms in the City's application to the Di vision of / Commerce and Industrial Development, the resolution of the City Council approving the project, and the proposed lease./
There is authority to support the defendants' contention that the essential nature of this transaction is a purchase of the building by the City on an installment basis as it is erected and payments made. See Green v. City of Mt. Pleasant, 256 Iowa 1184, 131 N.W.2d 5, 23, and Gregory v. City of Lewisport, Ky., 369 S.W.2d 133, 135. In holding that competitive bidding was not required, the Gregory case states, 369 S.W.2d loc. cit. 135, as follows: Perhaps it would not be acceptable for a city to contract, before commencement of construction, to buy a building upon its completion, if the only purpose of the plan were to escape statutory regulations governing construction of buildings by cities. But here the plan has a legitimate purpose — to insure that the building will conform to the requirements of the lessee for whose use the building is designed. We think the statutes in question are aimed primarily at construction of buildings for public use, so when, as in the case here, a building is being acquired for use of private industry the courts should not search for possible motives of evasion in the plan for acquisition of the building if the plan does not literally violate the statutes and if it has an apparent legitimate purpose."
There is also authority for the proposition that in the construction of an industrial facility financed by revenue bonds the municipality may act through an agent or representative as provided in the proposed lease agreement and that statutes such as § 71.840 and 71.847 do not compel a construction that the municipality itself must directly construct the building or execute the building contract as a party thereto. See Green v. City of Mt. Pleasant, 256 Iowa 1184, 131 N.W.2d 5, 23, where in a similar situation the court stated: "Under the arrangement the development corporation is acting as a representative and agent for the city in the construction of the building, and in connection with this construction the development corporation is authorized to incur certain obligations and is entitled to receive reimbursements out of proceeds of the sale of revenue bonds. It is the court's opinion the arrangement with the development corporation is actually one for the construction of a building by the city through its representative." In the present case the Division of Commerce and Industrial Development has deetrmined that the safeguards and supervision retained by the City under the plan submitted and approved are sufficient to satisfy the public interest.
The plaintiffs discount the persuasive authority of the Green and Gregory cases by the assertion that neither Iowa nor Kentucky have legislation requiring municipal control of construction and competitive bidding on these industrial development projects. Even if this contention, so far as it goes, were sound, it does not take into consideration the force and effect of § 27 of Art. 6 which authorizes the proceeds of the bonds to be used to pay the cost of purchasing and constructing the facility as well as the provision that the bonds must be paid solely from the revenue derived from the facility.
Section 71.843, further relied on under the second section of plaintiffs' brief, provides that: "Whenever the approved plan for the project calls for the construction, improvement or extension of facilities, the municipality shall enter into a contract for the purpose. All contracts shall be let on competitive bidding to the lowest and best bidder. Notice of the letting of the contracts shall be given in the manner provided by section 8.250". Section 8.250 deals with contracts for "the expenditure of moneys appropriated by the state in whole or in part, or raised in whole or in part by taxation", but the reference is to the manner of giving notice. Legislative provisions requiring public works to be awarded upon a public letting to the lowest responsible bidder are intended to secure unrestricted competition among bidders, eliminate fraud and favoritism, and avoid undue and excessive costs which would otherwise be imposed on taxpayers. Hillig v. City of St. Louis, 337 Mo. 291, 85 S.W.2d 91. But such a provision is not invariably applicable. Wegmann Realty Co. v. City of St. Louis, 329 Mo. 972, 47 S.W.2d 770, 775[5].
Ordinarily a statute requiring competitive bidding on public improvements is applicable only to contracts whereby the city itself assumes an obligation or indebtedness. 63 C.J.S. Municipal Corporations § 1148, p. 814, n. 36.5 1966 pocket part. 63 C.J.S. Municipal Corporations § 1148, p. 814, states: "A statute requiring a call for bids in the case of improvements to be paid out of general funds of the municipality has been held inapplicable to improvements payable out of the revenues from the improvement or out of special funds provided therefor." Supporting this statement are two cases dealing with funds from revenue bonds and applying what is sometimes referred to as the "special fund doctrine". See Utah Power & Light Co. v. Provo City, 94 Utah 203, 74 P.2d 1191, cert. den. 305 U. S. 628, 59 S.Ct. 92, 83 L.Ed. 402, and Barnes v. Lehi City, 74 Utah 321, 279 P. 878. This doctrine is recognized and applied in Missouri. In Kansas City Transfer Co. v. Hul-ing, 22 Mo.App. 654, it was held that a provision of the charter of Kansas City which required all city improvements to be let by contract to the lowest and best bidder was not violated since the provisions did not apply to work done at the expense of adjacent property holders.
The proposition approved by the voters of Jefferson City places a limit of $8,500,000 upon the amount of bonds that can be issued. The construction fund is therefore limited to the proceeds of the revenue bonds. The lease agreement provides that if less than the total sum is needed to acquire the facility the remainder shall be used to retire bonds. If the facility costs more than $8,-500,000, Interco agrees to pay the difference. All the constitutional and statutory provisions meticulously guard against the municipalities incurring any personal liability or obligation with respect to projects financed by revenue bonds. Section 27 of Art. 6 provides that the principal and interest of the bonds shall be payable "solely from the revenues derived by the municipality" which in this case are rental and other payments provided by the lease of the facility. All of the statutes likewise undertake to prevent the municipality from incurring a general obligation. It would be entirely out of harmony with the character and all attributes of revenue bonds if the intention of § 71.843 was to require a municipality in sponsoring the erection of a specialized industrial plant to become a party to the contract for all purposes and to let the contract on competitive bidding to the lowest and best bidder. It would be contrary to the central purpose of permitting the issuance of this kind of bonds.
Such a requirement would expose the municipality to the risk of incurring a general obligation, of undertaking to make an illegal contract, or reading into the statute exceptions and qualifications that its language does not permit. These examples demonstrate the possibilities. If we construe § 71.843 as requiring the City in the case of a revenue bond proj ect to enter into the usual construction contract without limitation as to the funds from which the agreed contract price will be paid, one of two things will happen. If the contract price is less than the debt limitation imposed by § 26(a) and 26(b) of Art. 6, there will be a valid contract which creates a debt or obligation separate and apart from the revenue bond obligation. The contract creditor in this instance would not be limited to the special fund derived from the proceeds of revenue bonds, but could resort to general revenue funds for the payment of this contract indebtedness. Sager v. City of Stanberry, 336 Mo. 213, 78 S.W.2d 431, 438-439[4]; Hagler v. City of Salem, 333 Mo. 330, 62 S.W.2d 751, 753[1] ; Hight v. City of Harrisonville, 328 Mo. 549, 41 S.W.2d 155, 159 [3].
If the contract price exceeds the debt limitation imposed by § 26(a) and 26(b), then the contract is ultra vires and void ab initio because a proposal to incur a debt of this magnitude must be submitted at an election and be approved by two-thirds of the qualified electors voting thereon. Grand River Township, De Kalb County v. Cooke Sales & Service, Inc., Mo., 267 S.W.2d 322, 325[3-S]; Shikles v. City of Clinton, Mo.App., 319 S.W.2d 9, 11. In this second instance, compliance with § 71.843 would be legally impossible although the City was lawfully authorized by § 27 of Art. 6 and a vote of the people to issue revenue bonds. The statute would thus thwart the purpose of issuing the revenue bonds.
On the other hand, if we construe § 71.-843 as authorizing or directing the City to enter into a contract limiting and confining the source of payment to the special fund realized from the sale of revenue bonds, we would be reading into the statute an exception or limitation not expressed or warranted by its broad language. Furthermore, the exception or qualification would not be necessary if the project is to be constructed with the proceeds of general obligation bonds which are "debts" within the meaning of § 26(b), Art. 6, of the Constitution, and no additional burden would be imposed by compliance with § 71.843.
The construction of § 71.840, 71.843 and 71.847 urged by the respondents would impair and restrict the constitutional right of the City under § 27 in that these sections would compel the City to "enter into a contract" and "to construct" the facility in derogation of the City's constitutional right to issue and sell revenue bonds "for the purpose of paying all or part of the cost of purchasing [or] constructing" the facilities specified. Emphasis added. This portion of § 27 has been held to be self-enforcing. See State ex rel. City of Fulton v. Smith, 355 Mo. 27, 194 S.W.2d 302, 304, wherein this court said: "On the contrary its very terms are that any city, upon a prescribed vote,'may issue and sell,' etc. We think the language so plain, and its intent so evident that it must be held to directly confer upon the city the authority to issue and sell such revenue bonds as are here under scrutiny 'by vote of four-sevenths of the qualified electors thereof voting thereon.' "
In general a constitutional provision is subject to the same rules of construction as other laws with due regard being given to the broader scope and objects of the constitution. State ex rel. Curators of the University of Missouri v. Neill, Mo., 397 S.W.2d 666, 669 [2]. The general rule is that where an act is amended the parts retained are regarded as a continuation of the former law and are entitled to receive the same construction. State ex rel. Klein v. Hughes, 351 Mo. 651, 173 S.W.2d 877, 880[4, 5]; State v. Ward, 328 Mo. 658, 40 S.W.2d 1074, 1078[11]. Unchanged by the amendments are those parts of § 27 which empower the cities to issue and sell revenue bonds to pay the cost of purchasing and constructing the several projects and to restrict the payment of the bonds and interest solely to the revenues derived from the operation or lease of the facility. In the later case of Petition of Monroe City, Mo., 359 S.W.2d 706, 710-711, there was no retreat from the holding in the City of Fulton case that § 27 as originally adopted was self-executing. The Monroe City case holds the part added or wedged into § 27 relating to the lease or other disposition of a plant for industrial development did need a "statutory charting of its course". There is no contention that the holding of City of Fulton has been impaired in any material respect.
Comparison of pertinent portions of § 23(a) and § 27 of Art. 6 further demonstrates the greater power and flexibility conferred directly on the municipalities by § 27. For instance, § 23(a) provides that the cities specified may become indebted for the purchase or construction of manufacturing and industrial plants to be leased or otherwise disposed of pursuant to law to private persons or corporations. The basic theory of revenue bonds as expressed in § 27 is to prevent the cities from becoming indebted for any of the projects authorized. The latter part expressly provides that the revenue bonds and interest shall be payable solely from the revenues derived from the facility. Section 23(a) further provides that the indebtedness incurred thereunder shall not exceed ten percent of the value of taxable tangible property in the city. By contrast, § 27 imposes no limitation upon the amount of revenue bonds that may be issued. The language of § 27 and its constitutional context indicates an intention to avoid any general obligation or liability being imposed on the city in connection with the industrial plant proposed.
It should be further noted that this constitutional provision does not require the city itself to construct the building; the language of the constitution is that the funds derived from the sale of revenue bonds shall be used for the purpose of "paying all or part of the cost" of constructing the industrial plant. The language used imposes no such restriction. Legislation may be enact- • ed to implement and facilitate the operation .of a constitutional provision without impairing those parts which are self-executing, but all such legislation must be subordinate to the constitutional provision and in furtherance of its purposes and must not tend to narrow or embarrass it. State ex rel. Randolph County v. Walden, 357 Mo. 167, 206 S.W.2d 979, 986[14] ; State ex rel. City of Fulton v. Smith, 355 Mo. 27, 194 S.W.2d 302, 305[5].
Our decision is limited to the factual situation before us. We do not decide that § 71.843 is wholly unconstitutional or that it could not apply to some project handled and financed in another manner. We do hold under controlling constitutional provisions and existing law that § 71.840, 71.843, and 71.847 have no legal standing to require a municipality itself to construct or to enter into the construction contracts for a project financed as in this case by industrial revenue bonds and to let such contracts by competitive bidding to the lowest and best bidder. The contention that the lease agreement fails to comply with § 71.840, 71.843, and 71.847 and is invalid for that reason is denied.
The plaintiffs' final contention is that the proposed lease "grants Interco immunity from taxation, is discriminatory against property owners and taxpayers of the City of Jefferson and constitutes an unlawful delegation of legislative authority to Interco." Article V of the lease deals with what appears to be every conceivable tax or assessment that may be imposed upon or assessed against or payable for or in. respect of the Facility; they are collectively referred to as "Impositions". The part of which the plaintiffs specifically complain is the last sentence of the first paragraph of Article V which reads as follows: "Landlord covenants that without Tenant's written consent it will not unless required by law take any action which may reasonably be construed as tending to cause or induce the levying of assessment of any Imposition (other than special assessments levied on account of special benefits) which Tenant would be required to pay under this Article and that should any such levy or assessment be threatened or occur Landlord shall, at Tenant's request, fully cooperate with Tenant in all reasonable ways to prevent any such levy or assessment."
The provisions of Article V do not grant, or purport to grant, Interco immunity from taxation; they are not discriminatory and do not constitute an unlawful delegation of legislative authority. At most the part complained of is an agreement to cooperate in resisting unlawful assessments. The first part of the first paragraph specifically binds Interco to assume and pay all Impositions against the property subsequent to the time the City acquires the land on which the facility will be constructed. The second paragraph of the article requires Interco to furnish the City with a photostatic copy of a receipted statement showing payment of any Imposition which Inter-co is obligated to pay within thirty days after the last day for payment. By the second paragraph of the article, the City agrees not to sell the fee or any interest in the facility during the term of the lease or any renewal thereof. The final paragraph grants Interco the right to contest the validity or the amount of any Imposition which Interco is obligated to pay upon posting a suitable surety bond. The entire article recognizes the obligation of Interco to pay all lawful Impositions and cannot be construed as any agreement for immunity, discrimination or lack of uniformity with regard to taxation. The contention is denied.
We have examined all of plaintiffs' contentions and find them to be without merit. The trial court erred in finding the issues in favor of the plaintiffs and against the defendants, City of Jefferson, John G. Christy, Mayor, Interco Incorporated, Stern Brothers & Co., and Glore Forgan-Wm. R. Staats, Inc., and erred in restraining and enjoining said defendants from entering into or giving effect to the lease by and between City of Jefferson, Missouri, and Interco Incorporated, which was submitted in support of the application by the City of Jefferson to the Division of Commerce and Industrial Development on May 17, 1966, for issuance of industrial revenue bonds in the amount of $8,500,000.
Accordingly the judgment of the trial court is reversed.
This court further finds the issues in favor of the said defendants and against the plaintiffs and orders, adjudges and decrees that said lease as proposed is not invalid and that plaintiffs' petition be dismissed at plaintiffs' cost.
HOLMAN, HENLEY and SEILER, JJ., concur.
FINCH, J., dissents in separate dissenting opinion filed; EAGER and DONNELLY, JJ., dissent and concur in separate dissenting opinion of FINCH, J.