Bohn v. Salt Lake City

This is an original proceeding brought in this court on notice to the defendants, by which the plaintiff, as a citizen and taxpayer on his own behalf and of others similarly situated, seeks a peremptory writ of prohibition to prevent Salt Lake City and its board of commissioners from consummating or awarding proposed contracts for the construction of a system of storm sewers, for the reason that the proposed contracts contain provisions which are alleged to be illegal and wasteful. The issues are made by the demurrer to the amended petition.

At this point we deem it proper to acknowledge our appreciation to Mr. P.T. Farnsworth, Jr., and Mr. E.A. Walton, members of the bar of this court, who, by our request, appeared as friends of the court and participated in the oral argument and have each furnished us a helpful brief on the questions here involved.

The amended petition shows that Salt Lake City has undertaken to construct a system of storm sewers, and that such storm sewers are a much needed, and when constructed will be a beneficial, public improvement. From what is alleged it is shown that such storm sewers will enhance the safety to life and property throughout the city, and will, to that extent, promote the welfare of its inhabitants. The commissioners of Salt Lake City approved and adopted certain plans and specifications which they had caused to be drawn up for the proposed sewers, and caused an estimate of the cost of the construction and installation of the entire project in accordance with approved plans to be made. This estimate found that the cost of the construction of the proposed sewers would be $600,000.

At a special bond election held October 27, 1931, Salt Lake City was authorized to create a bonded indebtedness in the sum of $600,000 for the purpose of obtaining the necessary funds with which to construct the proposed public improvement. In calling the election no other or additional purpose or reason why such indebtedness should be created was submitted to the electors.

The proposed system consists of several separate and distinct units that have no direct relation to each other in their construction, and which will be, in their operation, entirely independent of each other.

After inviting public bids for the work to be done according to the restrictive plans and specifications approved by the commissioners, and a proposed contract containing the same restrictive provisions, separate contracts for four of such units have been awarded, and work is being done thereunder, and, unless the defendants are prohibited by the order and judgment of this court, defendants will award contracts containing the same restrictive conditions for the construction of the remaining units of the system.

The provisions which the defendants insist shall be inserted in the contracts and of which complaint is made, in brief, are as follows: The contractors agree (1) so far as possible, there being no substantial and material difference in price to them, that all materials shall be Salt Lake City products and manufacture, and, if not procurable in Salt Lake City, then Utah products and manufacture, and if not procurable in Utah, the contractor shall have the right of selection; (2) that all excavating, loading, and back filling shall be done with hand labor, except that teams and tractors may be used for plowing and loosening the materials to be moved; (3) that contractors shall rotate all common labor, and, so far as practicable, all other labor once each week and shall not employ any workman more than two weeks in any month, nor shall they employ any workman in any month who has had two weeks work from any source during any given month if there are other men who are unemployed and available. An agency is set up by the commissioners to register all laborers with reference to such desired information, such agency shall not refuse registration to any able-bodied citizen of the United States who has been a bona fide resident of Salt Lake City for the past year; (4) preference in employment shall be given to citizens of the United States or those having declared their intention to become such, and particularly residents and heads of families of Salt Lake City; (5) eight hours shall constitute a day's labor; (6) that $3.50 per day shall be paid as a minimum wage.

It is averred that, by requiring all excavating, loading, and back filling to be done by hand labor to the exclusion of the use of mechanical trench diggers and other mechanical devices, the cost of the whole project will be unreasonably and unnecessarily increased to the extent of $35,000, and that it was so estimated by the defendants when making up the cost of the project. In respect to the provision calling for "rotation of labor" much is alleged in the petition of an uncertain and equivocal character. There is an absence in the amended petition of direct assertions of fact in reference thereto such as were made in oral argument when the case was submitted. It is alleged that the defendants estimated that this provision for the rotation of labor enlarged the cost approximately $20,000, but that in estimating the cost on the separate units this sum was not allocated to such units, but that this feature will make a substantial increase in the cost of the proposed improvement; that the prospective contractors had no opportunity to submit bids with this provision eliminated; that with this provision eliminated the cost of the entire project would be approximately $20,000 less.

At the time the cause was submitted, however, it was urged in oral argument that this particular stipulation, if inserted in the contracts, would increase the cost of the entire project to the extent of $20,000. In answer to that statement the city attorney said not a word in respect to the sufficiency of the pleading in that connection, but, in substance, did say that legally it could make no difference; that assuming that this feature of the proposed contracts would increase the cost of the entire project to the extent of $20,000 it falls in the same class, and will be controlled by the same principles, as the provisions calling for hand labor to the exclusion of machinery which he admitted will increase the cost of the project to the extent of $35,000.

Therefore, in our consideration of the case, we have taken it as admitted that the cost of the proposed storm sewers will be increased to the extent of $55,000 by reason of the insertion of the provisions calling for hand labor and for rotation of labor.

Other allegations in the petition are to the effect that the insertion of "each and all" of the foregoing restrictive provisions as terms of the proposed contracts will materially increase the cost of the construction of the proposed improvements.

In respect to the minimum wage it is asserted that some labor can be obtained in the Salt Lake City market for $3.00 per day, although substantially all contractors are paying $3.50 per day for common labor. It is shown that Salt Lake City and Utah, in common with the rest of the United States and other civilized nations of the world, are in the midst of an unprecedented business depression that has caused an unemployment situation that threatens to become a menace. It is alleged that all of said provisions are illegal and wasteful.

From the facts before us, the direct and primary commitment resting with the city and its commissioners by law is the construction of the storm sewers in order to provide a much-needed public improvement. It should be needless to say that the unemployment situation is something collateral to the object and purpose sought to be accomplished by the construction of the storm sewers. In view of what was stated in oral argument and what has been mentioned in the written briefs by counsel, we may here observe that there is always a demand for a certain amount of "common labor" that is incidental to the construction of any public improvement of the consequence of the proposed storm sewers, even when the method of construction admits of the freest competition, that made it desirable from an employment standpoint to have the storm sewers constructed independently of the method adopted.

It is not only obvious, but it is specifically admitted, as well, that the very unusual specifications in respect to the employment and rotation of hand labor were inserted in the proposed contracts on the city's instance for the purpose of creating employment. We then have a situation before us where the city and its commissioners, in discharging the obligation resting on them by law to build and construct the proposed storm sewers, are insisting that the unusual and restrictive specifications be made a condition of the proposed contracts, which they frankly admit will enlarge the cost thereof to the extent of $55,000. It is not urged that this extra expenditure adds anything to the value or to the merit of the work to be accomplished. It is frankly admitted that it does not. The decision to make this extra expenditure was not the result of any consideration tending to advance or promote the interest of the storm sewers, but was motivated entirely by considerations affecting the unemployment situation. These statements are all conceded.

The action taken by the city in the foregoing respects is challenged by the averments of the petition as being wasteful and illegal. We shall treat the illegality as going to the city's authority (1) to make the work of constructing the sewers subject to a condition which in no wise enhanced the value or the merit of the sewers, but is inspired solely by a purpose of alleviating in part the unemployment situation, a wholly collateral condition to the objects and purposes sought by the construction of the storm sewers; and (2) the diversion of a special fund.

This, then, calls for a consideration of the city's authority in the premises.

By general law providing for the organization and classification of cities, Salt Lake City is given express authority to construct, and keep in repair, drains and sewers, and to regulate the construction and use thereof. Comp. Laws Utah 1917, § 570 x 37. This specific grant of power carries with it such power as is necessarily and fairly implied or incident thereto. 1 Dillon Municipal Corps. (5th Ed.) § 237. Implied and incidental powers, so far as material to the present case, may be said to include those necessary to give effect to powers expressly granted. 1 McQuillin, Municipal Corps. (2d Ed.) § 367, p. 915 and § 368, p. 921; Ogden City v. Bear Lake, etc., Co.,16 Utah 440, 52 P. 697, 41 L.R.A. 305; Salt Lake City v. Sutter,61 Utah 533, 216 P. 234; American Fork City v. Robinson (Utah) 292 P. 249. It may here be stated that Comp. Laws Utah 1917, § 570 x 87, frequently referred to as the "General Welfare Clause," does not enlarge or annul the powers conferred upon the city by special grant. Malone v.City of Quincy, 66 Fla. 52, 62 So. 922, Ann. Cas. 1916D, 208; 1 McQuillin, Municipal Corps. (2d Ed.) § 368. In Dillon, Municipal Corps., § 239, the author states the rule as follows:

"The rule of strict construction does not apply to the mode adopted by the municipality to carry into effect powers expressly or plainly granted where the mode is not limited or prescribed by the legislature, and is left to the discretion of the municipal authorities. In such a case the usual test of the validity of the act of the municipal body is whether it is reasonable, and there is no presumption against the municipal action in such case."

In reference to this phase of the question it is said in McQuillin, Municipal Corps., vol. 1, p. 917:

"As relates to the exercise of powers it is generally regarded that municipal corporations have none of the elements of sovereignty; and they cannot go beyond the powers granted them, and that they must exercise such granted powers in a reasonable manner. These are legal propositions, well settled, and are everywhere enforced by judicial judgments. As put by Chief Justice Marshall: ``A corporation being a mere creature of the law, possesses only those properties which the charter confers upon it, either expressly or as incidental to its very existence.'"

Controlled by these elementary and well-settled principles, and keeping in mind that the city is engaged in carrying into effect a given power authorizing it to provide a system of storm sewers, it is plain that the city's action in insisting that the labor specifications we are now considering be 1 made a condition of the contracts and proposed contracts for the sole and admitted purpose of alleviating in part the unemployment situation carries it far beyond the orbit of the power it is ostensibly asserting. Its action in this respect is wholly without authority and therefore illegal. We say again that it is not contended that the provisions in question were inserted in the proposed contracts to enhance or promote any interest pertaining to the construction, character, or condition of the storm sewers. The only justification offered for the insertion of such provisions as conditions of the contracts is that of the employment situation. The very able counsel for the city frankly states in his reply brief that "these provisions are proper in view of the present conditions and present conditions only." The action of the city in respect to such provisions being without authority renders it unnecessary to consider the question of the reasonableness of its action in respect thereto.

It is urged by Mr. E.A. Walton, amicus curiae, that by reason of the foregoing labor provisions inserted in the proposed contracts there is a direct diversion to the extent of $55,000 from the fund created by the sale of the sewer 2 bonds. The Constitution of Utah, art. 14, § 5, provides:

"All monies borrowed by, or on behalf of the State, or any legal subdivision thereof, shall be used solely for the purpose specified in the law authorizing the loan."

We have already stated that the labor provisions are inspired solely by considerations affecting the unemployment situation, and it is admitted that this expenditure of $55,000 will add nothing to increase the value or merit of the storm sewers and are inserted as a provision of the contract for the sole purpose of alleviating in part the unemployment situation. If, peradventure, it should be asserted that all of the $55,000 was to be spent for labor that went into the construction of the sewers, and for that reason it cannot be said in point of truth or fact that there was a diversion of such money to any purpose other than that for which the fund was created, we should be compelled by the admitted facts to say that it was but a thinly veiled effort to do by indirection what cannot be done directly. We have no difficulty in coming to the conclusion that there is a plain diversion to the extent of $55,000 from a fund specifically created by the sale of bonds for the purpose of constructing a system of storm sewers for the purpose of affording employment for the unemployed. This cannot meet the sanction of the law. There is no contention made here on the part of the city to the contrary, and for such reasons this contention must be upheld.

The validity of the provisions in respect to the minimum wage is also brought in question by the issues before us. The power of the city to make such restrictions is directly challenged. There is apparently some conflict of authority as to whether a municipality may prescribe a minimum wage. The decisions divide largely, if not wholly, upon the extent of authority conferred by statute upon municipalities in the respective jurisdictions. The power to fix a minimum wage and to prescribe the hours that shall constitute a day's labor are quite generally regarded as an exercise of the police power. State v. Tibbetts,21 Okla. Crim. 168, 205 P. 776; III McQuillin Municipal Corps. (2d Ed.) § 1081; State v. Livingston Concrete Bldg. Mfg. Co.,34 Mont. 571, 87 P. 980, 9 Ann. Cas. 204. This power is inherent in the state.

"A municipal corporation has no inherent power to enact police regulations, but derives it solely from the legislature, and consequently can exercise only such police power as is fairly included in the grant of powers by its charter." 19 R.C.L., § 108.

We are referred to a number of decisions from jurisdictions where the charter powers of municipalities are far more comprehensive than is the case in this state. As illustrations, counsel has cited City of Milwaukee v. Raulf,164 Wis. 172, 159 N.W. 819; and Malette v. City of Spokane, 773 Wash. 205, 137 P. 496, 51 L.R.A. (N.S.) 686, Ann. Cas. 1915D, 22, and has placed considerable stress upon the very able and learned arguments made therein all of which we can and do approve, but inasmuch as the charter powers of municipalities in these cases were so much more comprehensive than we have in this state — in fact, both decisions refer to and speak of the "Home Rule Act" — they are not at all apposite to the question we are now considering in view of our statute. There is in this state no express or implied power conferred upon a municipality which directly or by implication authorizes a city to dictate to a contractor the wages that he shall pay his employees. It is, however, contended by way of argument that the city might have done the work without letting it out on competitive bids and could then fix a wage of $3.50 per day. Assuming, of course, that $3.50 is a fair wage that might be true, but that is not the case before us. But even so, we do not think it a true analogy to assume that it has the like right to dictate to its contractors the wages they must pay their workmen. In this jurisdiction, inasmuch as municipalities have none of the elements of sovereignty in exerting their given powers, we think the provision in the proposed contracts with respect to the minimum wage must be ruled out.

The power and right of Salt Lake City to impose restrictions in the proposed contracts that give preference to heads of families of Salt Lake City is also fairly brought in question under the issues before us. In considering this question it should be kept in mind that the public policy of this state is fixed primarily by the Constitution of the state and the legislative enactments and to a very inconsequential extent by the decisions of this court. There is a statute in this state bearing directly upon the proposition we are now considering. Comp. Laws Utah 1917, § 4865, provides:

"In employing workmen in or on the construction of public works by the state, county, or municipality, or by persons contracting with the state, county, or municipality, preference shall be given citizens of the United States, or those having declared their intention of becoming citizens. In each contract for the construction of public works the provisions shall be inserted to the effect that if the provisions of this section are not complied with the contract shall be void."

It is thus seen that the statute, in the employment of labor on public works, whether by contract or otherwise, has given the preference to citizens of the United States and those having declared their intention to become citizens. But the city, in letting the contracts, has 4 imposed conditions that preference be given to residents of Salt Lake City and who are heads of families. It is thus obvious that the city by so doing imposed a preference not embraced nor included in the statutes, and contrary to the statute restricted and limited the preference to heads of families of Salt Lake City. The city was, as we are, bound by the statute and by the policy so declared by the state, and which may not lawfully be enlarged or restricted. This provision of the contract cannot be sustained.

From what has been said it is obvious that the writ prayed for should be granted.

Let the peremptory writ be granted.