Court Opinion

ID: 6566107
Source: CourtListenerOpinion
Date Created: 2022-07-20 19:19:56.156179+00
Date Added: 2024-06-11T15:56:44.506915
License: Public Domain

Mr. Justice Gabbert
dissenting:
At an election held May 20, 1913, section 355 of the charter was adopted by the electors of the city. By this section a tunnel commission was created, and provisions made for the issuance of bonds to raise funds with which to construct the “Moffat Tunnel”, and on February 17, last, tire taxpayers of the city, voted in favor of issuing such bonds. It is the validity.of these bonds which is the subject of inquiry, and the only question involved in this proceeding, and the question thus presented must ]ie determined by ascertaining whether the city, by our fundamental law, the constitution of the state, is without power, or is inhibited to create an indebtedness by the issuance of the bonds in question, for the purposes and under the conditions specified in section 355 supra-, and the contract hereafter noticed, in order to raise funds With which to construct the tunnel. The amendment to the charter, section 355, and the authorization of the voters to issue the bonds are legislative acts adopted by the people of Denver under their charter. It is elementary, as often declared by this court, that a legislative act will not be declared unconstitutional, unless it is clearly and palpably so, and in cases of doubt every intendment will be made in favor of its constitutionality, and that courts will only interfere in cases of clear and unquestioned violations of the fundamental law. In other words, a legislative act must be held constitutional, unless its unconstitutionality is established beyond a reasonable doubt.
The majority opinion declares the city is without authority to authorize the issuance of the bonds involved, because inhibited by sections 1 and 2 article XI of the constitution. With due deference to the majority, it is submitted, that this is not tenable. In substance, so far as material to consider, sections 1 and 2 article XI pro*39vide that a city shall not lend or pledge its credit, directly or indirectly in any manner to, or in aid of any corporation foy any amount, for any purpose, or become responsible for any debt, or liability of any corporation, nor shall it make any donation to, or in aid of any corporation, or become a joint owner with such corporation. That neither of these provisions is violated, is clear when section 355 of the charter, and the contract entered into between the tunnel commission, and the Denver and Salt Lake Railroad Company are analyzed. Section 355 creates a tunnel commission, and confers upon that body all the powers granted to the city by article XX of the constitution, and otherwise existing hy operation of law; authorizes the commission to acquire, construct, build, or assist in building, a tunnel through, the main range of the Rocky Mountains, in the vicinity of James Peak, and the necessary approaches thereto, to be known as the “Moffat Tunnel”, for the purposes of transporting freight, passengers, water, and electricity; provided that in the event the tunnel shall be originally constructed for the transportation of freight and passengers, the right shall be reserved by the city in perpetuity to construct and operate through such tunnel suitable apparatus for conveying water and electric current from the western to the eastern portal for the use of the inhabitants of the city, and to permit the use of the tunnel, upon a fair and equitable basis, by any and all railway lines desiring such use. It also provides the commission may arrange that a portion of the funds needed for the construction of the tunnel may be furnished by corporations, and that the commission may enter into contracts with such corporations with reference to the construction, control, future lease, sale, or disposition of the tunnel, but expressly provides that until the city shall have been reimbursed in full for all moneys expended by it with interest, and is discharged from all financial liability in connection therewith, it shall retain the ownership of the tunnel, and that the rights reserved to utilize it for the trans*40portation of water and electricity, shall be perpetually retained, notwithstanding, any sale or lease of the tunnel. The section then provides that if on investigation the commission shall find that the construction of the tunnel is desirable and feasible, that that body shall determine the amount of bonds necessary to be issued for that purpose, and may by ordinance of the city council, submit to the vote of the taxpaying electors, the proposition of issuing such bonds, and if it is carried, that annually thereafter, a tax shall be levied to raise funds to discharge the interest and the principal of the bonds as they mature, unless suitable provisions for these purposes are otherwise made, and finally declares, “The inhabitants of the City and County of Denver, by the adoption of this Charter Amendment, do find and declare that the said tunnel will, in their judgment be of local use and convenience to the people, and that it is also absolutely essential to the future growth and welfare of the said City and County”.
After the adoption of this section the commission entered into a contract with the Denver and Salt Lake Railroad Company, which owns and is operating a line of railroad from Denver west, the salient- features of which are as follows: The tunnel shall be constructed by the commission and two thirds of the cost, or three million dollars is to be paid by the city, and one-third by the railroad up to four and one-half million dollars, and the excess above that amount, if any, is to be paid by the company; that the amount to be paid by the company shall be deposited with a depository, to be mutually agreed upon, or secured in a suitable manner; that the company shall pay the interest on the bonds and provide a sinking fund to discharge them at maturity, and that the consideration for the obligations which it thus assumes, is the right to operate and maintain the tunnel for railroad purposes, and ultimately acquire it for this purpose. It requires the railroad company, upon the request of the city, to allow any other railroad company to use the tunnel, and its tracks and facilities for a *41distance of thirty miles east and a distance seventy-five miles west of the tunnel, upon specified conditions. The contract requires the company to commence work upon the extension of its road from Craig to Salt Lake contemporaneously with the commencement of work upon the tunnel, and complete it within five years after the completion of the tunnel. By the contract the company is given the option on or before the maturity of the bonds, to purchase the tunnel by the payment of the principal of such bonds, and accrued interest thereon, but this option is subject to the perpetual right of the city to transport through the tunnel, water and electric current, and also subject to the perpetual right reserved by the city to have the tunnel, approaches and tracks outside used by other railroads. In other words, the option extends only to the purchase of the tunnel by the company for its own railroad operation purposes, and does not give the company the right, in the event of such purchase, to interfere with the use of the tunnel by the city for any of the - other purposes for which it is to be built by the city. The company is to operate the tunnel for railroad purposes at its own expense. Finally, the contract provides that if the company, after completion or during the construction of the tunnel fails to pay the interest on the bonds or deposit the necessary amount in the sinking fund, or comply with any other material provision of the contract for three months, it may be terminated by the commission, and all moneys paid by the company thereunder forfeited and held as liquidated damages. It contains other provisions which are not of any moment in determining the validity of the bonds.
From the foregoing synopsis of the provisions of section 355 and the contract, it is apparent that there is not a word or line in either which violates, in letter or spirit, the inhibitions contained in sections 1 and 2 article XI of the constitution. The city has not loaned or pledged its credit to, or in aid of the railroad company in any amount, or in any manner, for any purpose whatever; it *42has not become responsible for any debt, contract, or liability of the company, neither has it made any donation or grant to, or in aid of the company. In brief, the construction of the tunnel is undertaken by the city alone for its 'own benefit, and the tunnel is, and remains its own exclusive property until the option to purchase is exercised. True, the company is to furnish at least one third of the cost of the tunnel, but the city is not obligated to refund the sum thus advanced, and incurs no liability of any kind in connection with such advancement. On the contrary, if the company fails to comply with the obligations imposed upon it by the contract, it forfeits the advancement to the city. The consideration for the advancement by the company is an option to purchase the tunnel, and a lease or license to lay tracks in the tunnel, and operate its trains through the same. It would certainly be an anomalous proposition to say that because the city had undertaken to construct the tunnel it was without authority, for a valuable consideration, to contract in advance to sell or lease it for one of the purposes for which it was constructed. No such inhibition is found in the provisions of the constitution under consideration, and it is impossible, in my opinion, to deduce from either section* 355 of the charter, or the contract, that by this arrangement the city has pledged its credit to, or in aid of the company; become responsible for its debts, or made a donation to it. The option to purchase and lease or license given the company is nothing more than the exercise of wise business judgment on the part of the commission, which assures the use of the tunnel for one of the main purposes for which it was designed, and in effect provides for a return upon the investment by the city, until the option to purchase is exercised, and then if exercised, leave such rights in the city as will enable it to require the purchaser to permit the use of the * tunnel by other railroad companies, and the other purposes for which it is designed. Nor in the event the company purchases the tunnel, nor under the arrangement existing, until the option to purchase is exercised, is *43there any joint ownership which the constitution inhibits. The tunnel is the property of the city. It has no interest whatever in the railroad or its operation; this belongs exclusively to the railroad company, and in ease it purchases the tunnel its ownership is for a purpose with which the city is in no manner connected. The city will still have the right to use the tunnel for the transportation of water and electricity, but this right belong’s to it alone. The joint ownership which the constitution inhibits, is a joint ownership for the same purpose or use. Neither can it be said that because the section provides that the commission may assist in building the tunnel, it thereby lends aid to a coropration which the constitution inhibits, as that would depend upon whether under any contract the commission entered into, by virtue of provision of the section, aid was given contrary to constitutional restrictions. It is therefore manifest that plaintiff in error has not only failed to establish beyond a reasonable doubt, that section 355 of the charter or the contract violate the constitutional provisions under consideration, but it appears clearly and beyond question that they do not.
Suppose the tunnel commission had been given power in the first instance to construct the .tunnel at the expense of the city, by the issuance of bonds, and after it had been constructed, had been authorized in a legal manner to enter into a contract with a railroad company, operating a line of road from the city west, to lease the tunnel to the company for railroad purposes, and give it an option to purchase the tunnel, it certainly could not be said that such authority was inhibited by the constitution. Between such an arrangement and the one made there is no difference in effect or principle, except that the commission by entering into the arrangement it has in advance, as authorized to do by section 355, has exercised sound business sense, for the reason provision has been made before any money is expended which assures the use of the tunnel for the transportation of freight and passengers, the payment of a valuable consideration upon the *44money expended, and for a sale which will reimburse the city for all expenditures. Such an arrangement is to be commended, rather than condemned upon the theory that thereby constitutional limitations are violated, when in effect it is simply the exercise of good business judgment.
Counsel for plaintiff in error contend that the city is without power to issue the bonds because a municipal corporation cannot exercise any powers except those expressly granted, or fairly implied as incident to such powers, or those essential to the declared objects and purposes of the corporation. This is a sound proposition of law, but in no sense applicable. Denver is operating under a special charter by virtue of the provisions of article 20 of the constitution. In Walker v. The City of Cincinnati, 21 Ohio St. 14, 14 Am. Rep. 24, an act of the legislature of Ohio which empowered the city to build a railroad from the city to Chattanooga, was under consideration. The supreme court of Ohio held, that unless prohibited by the constitution it was within the legitimate scope of legislative power to authorize a city to construct a railroad in which it had a special interest. In this connection it should be noted, that Judge Dillon in his work on municipal corporations, from which counsel for plaintiff in error have quoted extensively, says in effect, that in the absence of. special restrictive constitutional provisions, it is competent for the legislature to authorize a municipal corporation to construct railways in which such corporation has a special interest, and impose upon its citizens taxes for that purpose. If Denver could construct a railroad to Salt Lake, including the tunnel, clearly it may construct one of the important links in the line, namely, the tunnel alone, on its own account, and in consideration of a railroad company aiding in constructing it, give such company a lease and option to purchase. Otherwise the tunnel would not benefit the city. Our own court has repeatedly held that the object of article XX was to confer upon the people of Denver, not only the powers'expressly mentioned in that article, but every *45power the legislature theretofore possessed in making a charter for Denver.
It was upon the basis that the people of the city of Denver possessed power to legislate with respect to charter provisions that we held in the Auditorium case, (Denver v. Hallett, 34 Colo. 393.) it was within the power of the people of the city of Denver to provide by charter 'for the erection of an auditorium, and to issue bonds to discharge the indebtedness for that purpose, for the reason that the people of the city possessed the power to legislate on this subject. That is precisely the situation v in the case at bar. Authority has been conferred upon the tunnel commission to build the Moffat tunnel, through legislation by the people of the city, which they have the power to enact. They have provided for the issuance of bonds for this purpose; they have declared that the tunnel will be of local use and convenience to the people, and that it is absolutely essential to the future growth and welfare of the city. It is manifest from the, topography of the country west of the city, the necessities of the city, and the beneficial results which will follow the construction of the tunnel that these declarations have ample foundation upon which to base them. If the city could build an auditorium, which it was evident was not necessary for any municipal purpose, in the ordinary meaning of that term, and could not result in any financial benefit to the people of the city, except as it would serve to attract national conventions of various organizations which might meet here at long intervals of time, it certainly cannot be successfully asserted that the electors of Denver may not make provision by appropriate legislation, to construct a tunnel for the transportation of freight and passengers which will be of benefit to the people every day in the year.
Counsel for defendants in error contend that special authority is conferred upon the city to construct the tunnel under article XX of the constitution. It is unnecessary to discuss this question as it is clear the city is not inhibited from constructing such tunnel by that section.
*46Counsel for plaintiff in error suggest.that some portions of section 355 are invalid because they undertake to empower the city to engage in business which it cannot be permitted to engage in. In answer to this it is only necessary to say, that where a part of an act is unconstitutional it does not vitiate the part that is good, when the good and bad can be clearly separated, and the good is complete in itself, and does not depend upon the void portion. They also urge that the section violates section 8, of article XI of the constitution. In the opinion of the writer this contention is not tenable.
In my opinion the judgment of the district court sustaining the validity of the bonds should be •affirmed.