Court Opinion

ID: 9732687
Source: CourtListenerOpinion
Date Created: 2023-08-26 16:31:33.075908+00
Date Added: 2024-06-11T18:26:31.596966
License: Public Domain

Heffernan, J.
(concurring). I agree with the deci-sional point in the majority opinion that, “ ‘where no definite term is fixed and the contract is indefinite in that regard, either party may terminate it upon a reasonable notice.’ ”
I disagree with the dicta that seems to indicate that whether a contract is void or valid depends upon whether the municipality acts in a proprietary or governmental function. This is incorrect. A contract of a proprietary nature may be invalid, and a contract in the exercise of a governmental function may be valid. The question is not governmental versus proprietary. Rather, the question is whether the execution of a contract was within the express or necessarily implied powers of the municipality in the exercise of the general charter law or the home rule amendment.
When a municipal government seeks to perform a proprietary contract, the question is whether that contract is reasonably necessary to carry out the purposes of the municipality. It seems clear that no municipality can contract to perform functions of a private proprietary nature or invest its funds in risk enterprises merely because the contract is proprietary in nature. The test of a proprietary contract is whether it is for a public purpose and reasonably necessary to implement the purpose of the governmental unit and the general welfare of its citizens. Kiel v. Frank Shoe Mfg. Co. (1944), 245 Wis. 292, 14 N. W. 2d 164.
A contract involving the governmental function is valid and enforceable if it is within the express powers *10of a municipality, or within the powers necessarily implied, to carry out its governmental function. So, too, under sec. 66.30 (2), Stats., municipalities may contract for the receipt or furnishing of services or the joint exercise of any power or duty required or authorized by statute. It seems apparent that the subject matter which can be contracted for clearly embraces matters within the governmental function. A municipal government may also contract to pay future bond interest and may bind its successors and require them to levy taxes in the future — certainly a governmental function. They may do so, however, because they are specifically authorized to so act by a legislative delegation of power.
There is no prohibition against contracting to perform, or to have performed, a governmental function. The prohibition is against the ultra vires exercise of governmental function.
Thus, the nature of the power to be exercised is not the criterion, but whether the municipality has the power, by legislation or otherwise, to exercise extraterritorial governmental functions. This is a matter of statutory and common-law interpretation.
There is, however, an additional caveat which must be observed where a contract affects a governmental function. If the contract, without specific legislative authority, abrogates or bargains away the “sovereign” powers of the municipality or binds the hands of a future governmental legislative body so it cannot exercise governmental powers in the future, the contract is ultra vires and void.
This concurrence attempts to point out that the touchstone of the validity of a municipal contract is not to be measured solely by whether it is proprietary or governmental. Contracts executed in either capacity may be valid or void, depending upon the scope of delegated or implied powers pertinent to the particular facts. A *11contract otherwise valid, whether entered into in a governmental or proprietary capacity, may be terminated under the standards of Milwaukee v. West Allis (1935), 217 Wis. 614, 258 N. W. 851, 259 N. W. 724, but such termination may be effected whether the contract is proprietary or governmental.
Those cases discussing the invalidity of municipal contracts in respect to governmental function carefully explain that it is not the contracting for a limited time of a governmental function that results in invalidity, but the abrogation of sovereign responsibility — the bargaining away of the future right to govern. See: West Bend v. West Bend Heating & Lighting Co. (1925), 186 Wis. 184, 189, 202 N. W. 350, which carefully pointed out this distinction.
We have only recently dispensed with that monster of illogie that plagued litigants and lawyers for generations — the doctrine of governmental tort immunity based on a spurious distinction between governmental and proprietary functions.
The cases cited in the majority opinion to demonstrate that there is a difference between governmental and proprietary functions arise out of the now outmoded tort immunity distinctions. They ought to have no relevance in contract cases in the initial determination of whether a municipal contract is valid. They have not had heretofore, and I regret the retrogression in jurisprudence that the majority opinion suggests. The question in all municipal contract cases is the same: Is the subject matter within the contract power (public purpose, power implied or expressed) of the municipality — and if within that power was it exercised in such a manner as to preserve and not unduly bargain away the municipality’s “sovereignty” as conferred by the constitution or the legislature.
*12It is my hope that the dicta of the majority will not be interpreted as a holding that the nature of a municipal contract, proprietary vis-a-vis governmental, is in itself determinative of a contract’s validity. This was an assumption, not argued on this appeal, by the parties to the litigation. This court would be derelict in its duty if it were to accept erroneous legal assumptions of litigants. Parties cannot stipulate that their case shall be governed by bad law.
The majority disposes of the litigation here on sound principles of contract law. There is no reason, in addition, to rationalize the decision on the unsupported assumptions of the litigants.
I am authorized to state that Mr. Chief Justice WILKIE joins in this concurrence.