Wheeler v. Philadelphia , 77 Pa. 338 ( 1875 )

Mr. Justice Paxson

delivered the opinion of the court,

Two bills have been filed by the complainants against the city of Philadelphia, in both of which they aver that they are citizens and tax-payers of said city. In one bill they seek to restrain the city authorities from borrowing upon the credit of the city the sum of $1,000,000, for the extension of the Philadelphia Gas Works; in the other bill they seek to enjoin said authorities from borrowing upon the credit of the city the further sum of $1,000,000, to be applied to the construction of main sewers. The Gas Loan was expressly authorized by ordinance of the City Councils; in the case of the Sewer Loan the ordinance has passed only the Common Council. The ordinances referred to, depend for their validity upon the Act of 23d May 1874, entitled, “ An Act dividing the cities of this state into three classes,” &c. For the exercise of certain corporate powers, and having respect to the numbers, character, powers and duties of certain officers thereof, the cities now in existence or hereafter to 'be created in this Commonwealth, .are divided by the said act into three classes, as follows:

Those containing a population exceeding 300,000 shall constitute the first class.

Those containing a population less than 300,000, and exceeding 100.000, shall constitute the second class; and

Those containing a population less than 100,000, and exceeding 10.000, shall constitute the third class.

It was further provided by the 11th section of said act, that “ The councils of any city of the first class, the debt of which now exceeds 7 per centum upon the assessed value of the taxable property therein, shall be and they are hereby authorized to increase the said debt 1 per centum upon such valuation,” &c.

The complainants allege as the grounds of their application, that the Act of Assembly, above referred to, is unconstitutional and void, because:—

1. It creates an unconstitutional classification of the cities of the Commonwealth, and by indirection, legislates specially for the city of Philadelphia.

2. It authorizes the increase of the city debt without submission to the popular vote.

3. The act was so altered, during its passage through the House of Representatives, as to change its original purpose.

4. The object of the act is not clearly expressed in its title.

These four grounds of objection apply to both the bills.

As to the bill to which the Trustees of the Philadelphia Gas Works are made defendants, there is another ground:

5. In authorizes the city to obtain money for, or loan its credit to, a corporation, association or institution.

It was alleged on behalf of the city that the plaintiffs had ■no standing in court to enable them to raise these questions, because:—

1. As to the Gas Loan, the burden can never fall on the city, and

2. As to the Sewer Loan, it has only passed one branch of councils, and may never pass the other; or it may be vetoed by the mayor.

It is unnecessary to consider these objections at length. It is too late to question the right of a tax-payer, where money is to be raised by taxation, or expended by the treasury, to proceed in equity to test the validity of the law under which the proposed assessment or expenditure is to be made. Moers v. The City of Reading, 9 Harris 188; Mott v. The Pennsylvania Railroad Company, 6 Casey 9; Page v. Allen, 8 P. F. Smith 338; and other cases following the lead of Sharpless v. The City, 9 Harris 147, have put this question at rest.

The objection that as to the Gas Loan bill the burden of the proposed loan can never fall upon the city, if true in point of fact, would turn the complainants out of court. But the facts do not justify such an assertion. The proposed loan can only be issued upon the credit of the city, and the city’s certificates of indebtedness must be given therefor. The property of the complainants would be responsible for every dollar of the loan. To hold that this responsibility would not, under any circumstances, be enforced, is to assume that the business of manufacturing gas is absolutely free from all the contingencies to which every other branch of business is liable, and that the Gas Trust itself is so far above all other trusts in its own integrity, and that of its numerous employees and agents, as to render defalcations, embezzlements, and mismanagement impossible.

The Sewer Loan bill may be regarded as a bill quia timet, a well-settled branch of equity jurisdiction, recognised by this court in Baird v. Rice, 13 P. F. Smith 489, in which the passage of an ordinance appropriating any moneys, or laying any special tax in aid of the construction of new public buildings at Broad and Market streets, in the city of Philadelphia, was sought to be restrained. Also, in Page v. Allen, 8 P. F. Smith 338, before cited, and in Wells v. Bain, 25 P. F. Smith 39.

Having thus conceded the right of the complainants to file these bills, it remains to consider how far they have made out a case which entitles them to the equitable relief prayed for.

It is alleged that the Act of 23d of May 1874, offends against article 3d of section 7th of the Constitution. The material parts of said section are : “ The General Assembly shall not pass any local or special law * * * regulating the affairs of counties, cities, townships, wards, boroughs, or school districts. * * * Nor shall any law be passed granting powers or privileges where the granting of such powers or privileges shall have been provided for by a general law.” * * *

Without entering at large upon the discussion of what is here meant by a “local or special law,” it is sufficient to say, that a statute which relates to persons or things as a class, is a general law, while a statute which relates to particular persons or things of a class is special, and comes within the constitutional prohibition.

The necessity for classification is recognised in the Constitution itself. In the article upon the judiciary, section 5th, it says: “Whenever a county shall contain 40,000 inhabitants, it shall constitute a separate judicial district.” In section 12 of the same article: “ In Philadelphia there shall be established for every 30,000 inhabitants, one court not of record, of police and civil causes.” Again, in section 27 of the same article: “ In every county wherein the population shall exceed 150,000 the General Assembly shall establish a separate Orphans’ Court.” We are aware that it does not follow that because classification is resorted to in the organic law, the legislature may exercise the same power. -But the power existed at the time of the adoption of the Constitution; it had been exercised by the legislature from the foundation of the government; it was incident to legislation, and its exercise was necessary to the promotion of the public welfare. The true question is, not whether classification is authorized by the terms of the Constitution, but whether it is expressly prohibited. In no part of that instrument can^ any such prohibition be found.

For the purpose of taxation, real estate may be classified. Thus, timber lands, arable lands, mineral lands, urban and rural, may be divided into distinct classes, and subjected to different rates. In like manner other subjects, trades, occupations, and professions, may be classified. And not only things but persons may be so divided. The genus homo is a subject within the meaning of the Constitution. Will it be contended that as to this there can be no classification? No laws affecting the personal and property rights of minors as distinguished from adults ? Or of males as distinguished from females ? Or, in the case of the latter, no distinction between a feme covert and a single woman ? What becomes of all our legislation in regard to the rights of married women if there can be no classification ? and where is the power to provide any future safeguards for their separate estate ? These illustrations might be multiplied indefinitely were it necessary. But it is contended that even if the right to classify exists, the exercise of it by the legislature, in this instance, is in violation of the Constitution, for the reason that there is but one city in the state with a population exceeding 300,000; that to form a class containing but one city is in point of fact legislating for that one city, to the exclusion of all others, and constitutes the local and special legislation prohibited by the Constitution. This argument is plausible, but unsound. It is true, the only city in the state, at the present time containing a population of 300,000, is the city of Philadelphia. It is also true that the city of Pittsburg is rapidly approaching that number, if it has not already reached it, by recent enlargements of its territory.

Legislation is intended not only to meet the wants of the present, but to provide for the future. It deals not with the past, but in theory at least, anticipates the needs of a state, healthy with a vigorous development. It is intended to be permanent. At no distant day Pittsburg will probably become a city of the first class; and Scranton, or others of the rapidily growing interior towns, will take the place of the city of Pittsburg, as a city of the second class. In the meantime, is the classification as- to' cities of the first class bad because Philadelphia is the only one of the class ? We think not. Classification does not depend upon numbers. The first man, Adam, was as distinctly a class, when the breath of life was breathed into him, as at any subsequent period. The word is used not to designate numbers, but a rank or order of persons or things ; in society it is used to indicate equality, or persons distinguished by common characteristics, as the trading classes; the laboring classes; in science, it is a division or arrangement, containing the subordinate divisions of order, genus, and •species.

If the classification of cities is in violation of the Constitution, it follows, of necessity, that Philadelphia, as a city of the first class, must be denied the legislation necessary to its present prosperity and future development, or that the small inland cities must be burdened with legislation wholly unsuited to their needs. For if the Constitution means what the complainants aver that it does, Philadelphia can have no legislation that is not common to all other cities of the state. And for this there is absolutely no remedy but a change in the organic law itself.

This is a serious question. We have but to turn to the statute book to realize the vast amount of legislation in the past, special to the city of Philadelphia. We speak not now of what is popularly known as special legislation, private acts, &c., but of proper legislation, affecting the whole city, and indispensable to its prosperity. We may instance the laws in regard to the quarantine, lazaretto, board of health, and other matters connected with the sanitary condition of the city; the laws in regard to shipping and pilotage as affecting its commerce; laws concerning its trade, such as those that relate to mercantile appraisers, inspectors of flour, bark, beef and pork, butter and lard, domestic distilled spirits, flaxseed, leather, tobacco, petroleum ; and the laws in regard to building inspectors ; the storage and sale of gunpowder ; laws affecting its political condition, as by the division and subdivision of wards, and the establishing of the ratio of representation in councils. We have but to glance at this legislation to see that the most of it is wholly unsuited to small inland cities, and that to inflict it upon them would be little short of a calamity. Must the city of Scranton, over 100 miles from tide water, with a stream hardly large enough to float a batteau, be subjected to quarantine regulations, and have its lazaretto ? Must the legislation for a great commercial and manufacturing city, with a population approaching 1,000,000, be regulated by the wants or necessities of an inland city of 10,000 inhabitants ? If the Constitution answers this question affirmatively, we are bound by it, however much we might question its wisdom. But no such construction is to be gathered from its terms, and we will not presume that the framers of that instrument, or the people who ratified it, intended that the machinery of their state government should be so bolted and riveted down by the fundamental law as to be unable to move and perform its necessary functions.

The Constitution of the state of Ohio contains a prohibition of special legislation similar to our own. The question of the classification of cities under this section of their Constitution was considered by the Supreme Court of that state in Walker v. The City of Cincinnati, 21 Ohio St. 14, and such classification was held to be constitutional.

We do not think that the classification of cities, as contained in the Act of 23d of May 1874, offends against any constitutional provision.

This construction does not open the door to special legislation. It permits legislation for classes, but not for persons or things of a class. • As an illustration, it could not be held to authorize the legislature to open or vacate a particular street in a city of either of the classes named in the act referred to.

If the complainants were right in their position in regard to the classification of cities, and that the act classifying cities is a special act, applicable to Philadelphia alone, it would not help them. The legislature is authorized by the express terms of the Constitution to empower by special act a city to increase its debt. The language of that instrument is “ but any city, the debt of which exceeds seven per centum, may be authorized by law to increase the same.” It was entirely competent for the legislature to have passed an act authorizing the city of Philadelphia, by name, to increase its debt.

This brings us to the consideration of the second objection to the constitutionality of the Act of 23d of May 1874. The 8th section of article 9th of the Constitution, provides that, “ The debt of any county, city, borough, township, school district, or other municipality or incorporated district, except as herein provided, shall never exceed seven per centum upon the assessed value of taxable property therein, nor shall any such municipality or district, incur any new debt, or increase its indebtedness to an amount exceeding two per centum upon such assessed valuation of property, without the assent of the electors thereof, at a public election, in such manner as shall be provided by law; but- any city, the debt of which now exceeds seven per centum of such assessed valuation, may be authorized by law to increase the same three per centum in the aggregate at any one time upon such valuation.”

This section is not clearly expressed. Yet its true meaning may be gathered with reasonable certainty. The end sought to be attained was clearly a limitation upon the debt of municipalities, and seven per centum upon the assessed value of the taxable property therein was fixed as the maximum. The fact was, however, known to the convention that at that time the debt of the city of Philadelphia and perhaps some other municipalities, exceeded seven per centum. In such. instances an arbitrary provision, that there should be no further increase of the debt, might have worked great injury by the stoppage of public works already commenced and essential to the public convenience and welfare. It was therefore provided, that as to such municipalities the debt might be increased three per centum. The main controversy, however, was as to the manner in which such increase should be accomplished. Here again the distinction is preserved between municipalities whose debt is under seven per centum and those in which it exceeds seven per centum. In the former, the municipal authorities may increase the debt from time to time until two per centum has been added, provided the original debt, with the increase, does not exceed seven per centum. After the two per centum has been added there can be no further increase without the vote of the people. To illustrate:

The whole debt is not to exceed seven per centum.

We will suppose the debt to have been two per centum at the time of the adoption of the Constitution.

Two per centum may be added by the municipal authorities, making the debt four per centum.

No portion of the remaining three per centum can be added without the assent of the electors of such municipality at a public election, in such manner as shall be provided by law. But when a city, whose debt at the time of the adoption of the Constitution already exceeded seven per cent, seeks to increase its debt, it can do so only with the consent of the law-making power of the state. The Constitution has interposed the legislature between such municipality and any further increase of its debt. But when the legislative sanction has been obtained, the municipal authorities may increase the debt precisely as in the case of towns whoso debt is less than seven per centum. The proposed increase hero is one per centum. This clearly does not require a vote of the people. Whether it would have been necessary to have submitted the question to a popular vote, had the increase exceeded two per centum, is a question about which we express no opinion. When the point is legitimately raised we will decide it.

We regard this as the true and reasonable construction of the section of the Constitution referred to. It does no violence to any known rule of interpretation, and carries out the plain object of the section. Ingenious arguments may be based upon the relation of an article or preposition to the other language employed, but a broader view, giving to the words their ordinary signification, and having regard to the mischief sought to -be remedied, leaves us in no doubt as to the correctness of our conclusions.

We need not discuss the third and fourth points raised in the plaintiffs’ bill. It is sufficient to^say in regard to the third, that were we disposed to go behind the Act of Assembly and inquire into the regularity of its passage there is not sufficient proof before us, by affidavit or otherwise, to justify our interference. Nor do we see any force in the objection that the object of the act is not clearly expressed in the title. In Allegheny County Homes’ Appeal, antea 77, it was held that “ if the title fairly gives notice of the subject of the act, so as reasonably to lead to an inquiry into the body of the bill, it is all that is necessary. It need not be an index to the contents, as has often been said.” Tested by this rule, we do not regard the title as fatally defective.

It remains but to consider the fifth point.-

Article 9th, section 7th, of the Constitution, proYides, that the “ General Assembly shall not authorize any county, city, borough, township, or incorporated district, to become a stockholder in any company, association, or corporation, or to obtain or appropriate money for, or loan its credit to, any corporation, association, institution, or individual.”

It is alleged that the Gas Trust is an association or institution within the meaning of this section of the Constitution, and that an Act of Assembly authorizing the city to borrow money to extend the Gas Works, offends against said section.

The relation of the city to the Gas Works is not a new subject. It has been before this court upon several occasions, and in the Western Saving Fund Society v. The City, 7 Casey 175-185, will be found a very full history of the Gas Works, as well as an elaborate discussion of the rights of the city therein. We need not repeat what is already known to all who have investigated the subject. It is sufficient to state the conclusions which are legitimately to be drawn from what has heretofore been said and is now presented.

It is clear that the Gas Works are the property of the city of Philadelphia. All the deeds and muniments of title are taken in the name of the city. This is true not only of what may be called the original Gas Works, but of all purchases made since. The works of the Éichmond Gas Company, the Germantown Gas Company, the Southwark and Moyamensing Gas Company, the Manayunk Gas Company, and the Kensington Gas Company, have all been consolidated with the Philadelphia Gas Works. The title to each of these separate works is vested absolutely in the city. No other individual or corporation has any interest in them as stockholder or part owner. The Trustees of the Gas Works have no pecuniary interest in them. It is true they have the control of the management, hut this is by virtue of the original contract between the city and the bondholders and for the protection of the latter. This ■ is the scope of the decisions in the. Western Saving Fund cases. So long as the loanholders remain unpaid they have a right to demand that no change shall be made in the management, either as to the number of the trustees or their mode of appointment. But the moment the loanholders are paid the Gas Works revert to the city, and the trustees have no further duty to perform but to account with the city for their stewardship. They are agents of .the city, nothing more, and their possession of the works is the possession of the city, with this qualification, that until the city pays the debt for which they are pledged, the trustees cannot be moved or disturbed in their management.

For the purposes of this case we must treat this qaestion as if there were no trustees, and the works were operated by the city directly through officers or agents immediately under its control. Such being the case, are we to regard the Gas Works as an “ institution” having a separate, recognised existence apart from the city ? The affirmative of this proposition cannot be successfully maintained. The most that can he urged is, that the city is acting in a double capacity; in the one, exercising rights of sovereignty ; in the other, performing the functions of a private corporation in the manufacture and sale of gas. This tvas the view taken of it by this court, in the Saving Fund Cases, above cited. It was said by Mr. Justice Strong, delivering the opinion of the court, 7 Casey 185: “Nor can there be any doubt that the trust existing in the trustees is a private one, and that the city of Philadelphia, is to be regarded as a private corporation, so far as relates to its contract with the bondholder,s. It was not as a municipality that it dealt with them. As a local sovereign it had no authority to enter into the business of manufacturing and selling gas, for its sovereignty did not extend to such subjects any more than it did to almost any other manufacture.” This was of course predicated of what was then before the court, viz. : whether the city, in violation of its contract with the bondholders, could take the management of the works out of the hands of the trustees. While it is no part of the ordinary and necessary duties of a municipal corporation to supply its citizens with gas and water, it is nevertheless true that it may lawfully do so. Without desiring to enter into a nice discussion of the source of its right or power to do this, the fact that it has been exercised in this and many other states-for a long time unchallenged exists. Rights have grown up ; large expenditures and costly improvements made ; the health and comfort of large communities promoted thereby. The lighting of a city with gas, and supplying it with pure water, are entirely disconnected from wild speculations of the character indicated upon the argument.

We do not think the Gas Works have any separate entity. They resemble the Water Department and the Fairmount Park. Aside from the trustees, and they amount to nothing in our view of the case, the Gas Works may be considered as property belonging to the city, and operated, not for the purpose of speculation, but to promote the comfort of the whole body of the people. As their original acquisition and subsequent use were lawful, debts contracted therefor must be paid by the city. While, as regards the loanholder, the city may be considered as a private corporation, as between the city and her citizens, for whose benefit the works were constructed and are now used, it is of little moment whether we regard the former as a private corporation or a sovereign, legislating for the benefit of its citizens. In either event the latter are bound by the contract of the city. The constitutional provision referred to, was intended to prevent: First, the city from becoming jointly interested as stockholder with any company, association or corporation ; and second, from obtaining or appropriating money for, or loaning its credit to, any corporation, association, institution pr individual. The Gas Works being exclusively owned by the city, it is clear the case does not come within the first division above stated. It appears equally plain that the latter division or clause of the article referred to was not intended to apply to cases where the corporation, association or institution had no legal existence, separate and apart from the city, and where the latter merely sought to borrow money for its own use, in the improvement of its own property, lawfully acquired, for either the comfort, health, or pleasure of its citizens.

This clause in our Constitution, as well as the one in reference to special legislation, was borrowed from the Constitution of the state of Ohio. In Walker v. The City of Cincinatti, before cited, the Supreme Court held, that an Act of Assembly authorizing tho entire construction of a railroad by a city of the first class, where such road was material to the development of the city, and to empower the local authorities to provide means therefore by the taxation of its citizens, was not in violation of the constitutional provision referred to. Says Chief Justice Scott, in delivering the opinion of the court: 11 The mischief which this section interdicts is a business partnership between a municipal or subordinate division of a state, and individuals or private corporations or associations. It forbids the union of public or private capital or credit in any enterprise whatever. In no project, originated by individuals, whether associated or otherwise, with a view to gain, are the municipal bodies named permitted to participate in such manner as to incur pecuniary expense or liability. They may neither become stockholders, nor furnish money or credit for the benefit of the parties interested therein. As this alliance between public and private interests is clearly prohibited in respect to all enterprises of whatever kind, if we hold that these municipal bodies cannot do on their own account what they are forbidden to do on the joint account of themselves and private partners, it follows that they are powerless to make any improvement, however necessary, v'th their own means, and on their own sole account. We may be very sure that a purpose so unreasonable was never entertained by the framers of the Constitution.”

The section of our Constitution now' under consideration is not new. It is substantially the same as the amendment to the late Constitution, adopted in 1857. See article 11, section 7, Brightly’s Purdon 34. Since 1857 five loans, aggregating $4,500,000, have been issued by the city for the benefit of the Gas Works, without an objection on the part of any citizen. The considerations which are now urged upon us are not such as should move a chancellor to interfere, especially when there has been such universal and long-continued acquiescence.

The injunction is refused.