Case Name: JONES v. RACING COMMISSIONER; (JONES v. SHIRLEY)
Court: Michigan Court of Appeals
Jurisdiction: Michigan
Decision Date: 1974-10-08
Citations: 56 Mich. App. 65
Docket Number: Docket Nos. 18075, 18114
Parties: JONES v RACING COMMISSIONER (JONES v SHIRLEY)
Judges: Before: Quinn, P. J., and V. J. Brennan and Carland, JJ.
Reporter: Michigan appeals reports; cases decided in the Michigan Court of Appeals.
Volume: 56
Pages: 65–72

Head Matter:
JONES v RACING COMMISSIONER (JONES v SHIRLEY)
Opinion of the Court
1. Taxation — Statutes—Expenditure of State Funds — Constitutional Law — Parties—Standing—Court Rules.
At least five residents of the state who own property assessed for direct taxation are required by court rule in order to bring an action to test the constitutionality of an act involving the expenditure of state funds (MCLA 431.43; GCR 1963, 201.2[3]).
2. Taxation — Statutes—Expenditure of State Funds — Constitutional Law — Parties—Standing.
A prerequisite to a taxpayer’s right to maintain a suit to test the constitutionality of an act involving the expenditure of state funds against a unit of government is the threat that he will sustain substantial injury or suffer loss or damage as a taxpayer, through increased taxation and the consequences thereof (MCLA 431.43).
Dissent by V. J. Brennan, J.
3. Taxation — Statutes—Court Rules — Expenditure of State Funds — Constitutional Law — Parties—Standing.
The statute or corresponding court rulé which provides that "an action to prevent the illegal expenditure of state funds or to test the constitutionality of a statute relating thereto may be brought in the name of a domestic non-proSt corporation organized for civic, protective or improvement purposes, or in the names of at least 5 residents of this state who own property assessed for direct taxation by the county wherein they reside" is not the sole basis upon which taxpayers of Michigan may maintain the action; a taxpayer may also institute such an action if he demonstrates that he will sustain substantial injury or suffer loss or damage as a taxpayer, through in creased taxation and the consequences thereof (MCLA 600.2041[3]; GCR 1963, 201.2[3]).
Reference for Points in Headnotes
[1-5] 71 Am Jur 2d, State and Local Taxation § 42 et seq.
4. Taxation — Expenditure of State Funds — Constitutional Law— Parties — Standing—Statutes—Court Rules.
There is no requirement imposed that taxpayers demonstrate substantial injury if fíve or more residents of Michigan who own property assessed for direct taxation bring a taxpayer action to challenge allegedly illegal expenditures of state funds or the constitutionality of statutes providing for such expenditures (MCLA 600.2041[3j; GCR 1963, 201.2[3j).
5. Taxation — Statutes—Expenditure of State Funds — Parties— Standing — Constitutional Law.
A bettor at a licensed Michigan horse race track, who on his own behalf and on behalf of all bettors in Michigan similarly situated joined in an action to have an act involving the expenditure of state funds declared unconstitutional because the act increased the percentage retained by race track licensees as their commission from monies wagered at the track and increased the percentage of monies which the licensee is required to pay the State Treasurer from his commission, met the requirement needed for legal capacity to maintain the action because he suffered substantial injury as a result of the passage of the act where he did not receive as much money from his winning ticket on a horse as he would have before the act became effective (MCLA 431.43).
Appeal from Ingham, Ray C. Hotchkiss, J.
Submitted Division 2 June 11, 1974, at Lansing.
(Docket Nos. 18075, 18114.)
Decided October 8, 1974.
Leave to appeal denied, 393 Mich 772.
Complaint by Howard L. Jones, Henry Dodge, and James Del Rio against Leo C. Shirley, Racing Commissioner, for a declaratory judgment that 1972 PA 5 is unconstitutional. The City of Pontiac and the City of Pontiac Stadium Building Authority intervened as defendants. Summary judgment for plaintiffs. Defendants appeal. Plaintiffs cross-appeal.
Reversed.
Zolton Ferency, for plaintiffs.
Frank J. Kelley, Attorney General, Robert A. Derengoski, Solicitor General, and Harry G. Iwasko, Jr., and Florence E. Fraser, Assistants Attorney General, for the Racing Commissioner.
Sherwin M. Birnkrant, City Attorney, and Virtue & Carpenter, P.A., for City of Pontiac and Pontiac Stadium Building Authority.
Before: Quinn, P. J., and V. J. Brennan and Carland, JJ.
Former circuit judge, sitting on the Court of Appeals by assignment pursuant to Const 1963, art 6, § 23 as amended in 1968.

Opinion:
Quinn, P. J.
This declaratory judgment action was filed by plaintiffs to have 1972 PA 5; MCLA 431.43; MSA 18.966C13)* declared unconstitutional. Defendant Shirley moved for accelerated judgment on the basis that plaintiffs lacked legal capacity to sue, GCR 1963, 116.1(3) and that no plaintiff has demonstrated that he is or will be injured in his capacity as a taxpayer. After denial of this motion, there were extensive proceedings before the trial court culminating in a judgment declaring 1972 PA 5 unconstitutional.
Of the two appeals by defendant and intervening defendants, we deal first with the appeal of defendant because we find it dispositive of the entire litigation. The first claim of error by defendant relates to the denial of his motion for accelerated judgment.
GCR 1963, 201.2(3) provides:
"[A]n action to prevent the illegal expenditure of state funds or to test the constitutionality of a statute relating thereto may be brought in the name of a domestic non-profit corporation organized for civic, protective, or improvement purposes, or in the names of at least 5 residents of this state who own property assessed for direct taxation by the county wherein they reside."
1972 PA 5 involves the expenditure of state funds and this action was brought to test the constitutionality of that act, and the foregoing rule requires five plaintiffs, not three.
In Menendez v Detroit, 337 Mich 476, 482; 60 NW2d 319, 323 (1953), a unanimous Supreme Court stated:
" prerequisite to a taxpayer's right to maintain a suit of this character against a unit of government is the threat that he will sustain substantial injury or suffer loss or damage as a taxpayer, through increased taxation and the consequences thereof."
No plaintiff in this action demonstrates in the complaint that he will "sustain substantial injury or suffer loss or damage as a taxpayer".
For the foregoing reasons, defendant's motion for accelerated judgment should have been granted. While we recognize that there is a serious question of the constitutionality of 1972 PA 329 under Const 1963, art 4, §24, we decline to pass upon it without the proper parties plaintiff.
Reversed but without costs, a public question being involved.
Carland, J., concurred.
A practically identical act was passed by the same Legislature the same year, 1972 PA 329. Under Detroit United Railway v Barnes Paper Co, 172 Mich 586, 589; 138 NW 211, 212 (1912), PA 329 prevails.