Court Opinion

ID: 9583235
Source: CourtListenerOpinion
Date Created: 2023-08-21 22:36:19.751281+00
Date Added: 2024-06-11T13:38:53.673744
License: Public Domain

Miller, J.,
dissenting.
The wholesale produce market authority authorized by the questioned legislation to be established in every city or county having a population of more than 30,000 inhabitants is sought to be justified *760under the State’s police power. It it avowed to be in furtherance of the health, safety and welfare of the inhabitants, and each market authority is declared to be a political subdivision of the State.
In each county or city wherein such a market authority is activated in accordance with the terms of the act, it is empowered to maintain and operate a produce market for the buying, selling and distribution of perishable farm produce. Sections 3-79.2, 3-79.3.
Under § 3-79.4 each local market authority is authorized to construct and operate the market within or without the city or county upon owned or leased lands, acquire hold and dispose of real and personal property, lease the market facilities or any of them and fix the fees, tolls, rents and charges for their use, borrow money, issue bonds, enter into contracts, employ construction and financial experts, provide facilities for the operation of a restaurant, and sue and be sued.
It is thus evident that instead of possessing and exercising the attributes, powers and functions usually incident to a political subdivision, which the authority is declared to be, the activities and functions of the market are commercial and competitive. Though it is designated a wholesale produce market authority, yet its grant of powers does not limit it or those to whom it may lease its facilities to wholesale trade. It can enter into competition with privately owned wholesale or retail markets in the area.
Section 3-79.20 creates “a special loan fund” known as the Produce Market Loan Fund, the purpose of which is to provide “Equity capital for the construction of wholesale produce markets within the Commonwealth.”
Upon authorization by the Governor a loan not exceeding $300,000 may be made by the Commonwealth to a market authority activated in any county or city. § 3-79.23. The loan is to be repaid in yearly installments over a period of twenty-three years with interest at 3 per cent per annum and is to be secured “as to principal and interest in such manner as the Governor may prescribe.” § 3-79.24.
Aside from the questions of whether the establishment of a market authority is within the concept of the State’s police power and -whether it is, in fact, a political subdivision, I am convinced that each local facility to be established constitutes a work of internal improvement. Though its establishment be asserted under the police power and it is declared to be a political subdivision, yet if forbidden by a constitutional limitation, its validity cannot be sustained. The *761State’s police power must yield to a plain constitutional limitation or prohibition.
Section 185 of the Constitution expressly forbids the State to “become interested in any work of internal improvement, except public roads and public parks * * By undertaking to make loans to these local market authorities, the State undoubtedly becomes interested in the enterprise. The sole question to be determined is whether or not the market authority constitutes a work of internal improvement within the meaning of the constitutional provision.
The evils sought to be guarded against, the history of the development of works of internal improvement in Virginia and the unfortunate results experienced by the State as a consequence of its having extended credit and aid in the development and operation of these enterprises are set out at length in Almond v. Day, 197 Va. 782, 91 S. E. 2d 660. The history, authorities and treatises there cited impel the belief that it was the enunciation of a broad principle that the Constitutional Convention had in mind when it adopted §§ 12, 14, and 15 of Article 10 of the Constitution of 1869, now § 185, and not the enactment of prohibitive legislation against particular activities.
In Shenandoah Lime Co. v. Governor, 115 Va. 865, 871, 80 S. E. 753, in defining the term “works of internal improvement,” we referred to its historical meaning in Virginia and said that throughout the years in legislation and decisions, it “has included and had reference to the channels of trade and commerce, such as turnpikes, canals, railroads, telegraph lines, including in more recent years telephone lines, and other works of a like quasi public character. * * *” (Emphasis added.)
In the Debates of the Constitutional Convention of 1869 the object and prohibitive purposes of §§ 12, 14, and 15, Article 10, Constitution of 1869, now embodied in § 185 of our present Constitution, were pointedly stated and declared to be applicable to enterprises of this character. When it was then determined that the State should be prohibited from investing in or becoming interested in works of .internal improvement, that Convention did so upon the recommendation of its committee on Taxation and Finance. In presenting to the Convention the recommendation of that committee, its chairman, James H. Clements, pointed out the evil intended to be corrected and the unfortunate results that the State had experienced in the past in lending its aid to those enterprises. He said:
*762«# # * | B]ut taking into consideration the general fact that the State has up to this time derived no real benefit from any interests she had in any internal improvement, in connection with the other fact that capitalists are now to such an extent interested in building up marts of commerce at various points, we thought it wise to leave it to the individual interests of the country, believing that any enterprise hereafter mooted, if it possessed within itself genuine merits, would receive such support as would do away the necessity for the State lending her aid to it.” 1 Dabates and Proceedings of the Constitutional Convention of the State of Virginia (1868) 650.
With knowledge of Virginia’s unfortunate financial losses and with the hope of protecting the State from like experiences in the future, Chairman Clements, with prophetic foresight named the identical ofFending activity, i.e., “marts of commerce at various points” to which the State now intends to lend its aid and funds.
How may it now be rightly said that the Commonwealth is not forbidden by § 185 to lend its funds to these markets at various points throughout the State without disregarding the words and warning of Chairman Clements and the intent of the prohibition.
The decision of Almond v. Day, supra, is cited and relied upon in the majority opinion. It is readily distinguishable. There the purpose of the challenged legislation, Title 51, chapter 3.2, et seq., Code 1950, as amended, was to allow the State to invest the funds of the Virginia Supplemental Retirement System in recognized marketable securities. The declared purpose of the statute and the motivation for the contemplated investment were solely for the State’s benefit. Section 51-111.24(a) bestowed upon the board of trustees of the Virginia Supplemental Retirement System the power to make investment of the System’s funds but limited the Board’s power so that no investment could be made except “in securities, which, at the time of making are, by statute, permitted for the investment of reserves of domestic life insurance companies.” There the securities actually intended to be purchased by the Board were bonds having a rating of not less than “A” in the bond guide rating established by Standard and Poor Corporation, Moody’s Investment Service, and Fitch Investment Service, recognized authorities on investments. Under the act now in question the loan is to be made by the State upon recommendation of the Commissioner of Agriculture and Immigration, and “secured in such manner as the Governor shall prescribe.”
*763Under the definition of the term “works of internal improvement” given in Shenandoah Lime Co. v. Governor, supra, and delegate James H. Clements’ statement as to the purpose and intent of the prohibitions, now embodied in § 185, it is clear that when the State lends its funds to these “marts of commerce” for the purpose of fostering the enterprise, as is here evident, and not for the purpose of investing the State’s funds, it violates both the spirit and letter of the Constitution.
If these local market authorities may be established in the counties and cities of the Commonwealth, there is no constitutional provision to prevent the establishment and grant of aid by the State to other authorities, such as stockyard market authorities for the buying, butchering, processing, inspection, and selling of meats, or automobile market authorities for the buying, repairing, inspecting and selling of new and used automobiles, and a host of other commercial enterprises of similar character, so long as the authority be classified as a political subdivision of the State.
Here the State is not really investing its funds for its benefit. It is promoting and lending its funds to an activity of unproved financial stability. The evils sought to guarded against in § 185 and the danger to the State’s finances are inherent in the undertaking.
Wholly aside from the socialistic character of the present undertaking, it appears to be clearly violative of § 185 of the Constitution. So much of the act as authorizes loans to be made by the Commonwealth to these local produce markets should be declared unconstitutional.