Beals v. Pickerel Lake Sanitary District

1998 SD 42, 578 N.W.2d 134, 1998 S.D. LEXIS 41

• Court: South Dakota Supreme Court
• Decided: April 29, 1998
• Docket: None
• Status: Published

Opinions

MILLER, Chief Justice.

[¶ 1] Pickerel Lake Sanitary District enacted a resolution accepting the low bid of Dahme Construction Company to construct a sewer project within its boundaries. Melva Beals, a local resident, was opposed to the resolution and circulated referendum petitions seeking to place the decision to a vote of the electorate. The petitions were rejected by District. Beals sought a writ of mandamus to require District to set a referendum election. The circuit court denied the writ and Beals appeals. We affirm. ■

FACTS

[¶ 2] Pickerel Lake Sanitary District was incorporated by the Day County Commissioners in 1993. Since its inception, District has been preparing to construct a sewer project within its boundaries.

[¶3] After passing resolutions pertaining to financing of the sewer project, District opened bids on February 15, 1997, for the construction of Phase I of the project. Dahme Construction Company submitted the low bid, but because District was unsure of its own finances the meeting was adjourned until March 29,1997.

[¶ 4] When the meeting was reconvened on March 29, a resolution was adopted awarding the construction of Phase I to Dahme, based upon its low bid of approximately $1,194,000. Two of the three trustees of District voted in favor of the resolution. Construction on the project commenced two days later. "

[¶ 5] Beals was opposed to the resolution and subsequently circulated a referendum petition to request referral of the resolution accepting Dahme’s bid to the electorate. She obtained the signatures of twenty-seven registered voters within the district, thus meeting the statutory requirements for such petitions. The petition was sent to District’s clerk on April 24,1997, and the trustees were so notified. At a subsequent District meet-. ing,.a motion was made that the referendum petitions be rejected and, once again, two trustees voted in favor and one was opposed.

[¶ 6] On May 30, 1997, Beals sought a writ of mandamus from the circuit court attempting to require District’s trustees to set a referendum election as requested in the petition. The circuit court denied the writ. Beals appeals, claiming that Article III, § 1, of the South Dakota Constitution applies to sanitary districts and that SDCL 9 — 1—1(6), which defines “municipal corporation” and “municipality,” is unconstitutional. We affirm.

STANDARD OF REVIEW

[¶ 7] The proper construction to be given to a provision of our constitution is a question of law and is, therefore, reviewed de novo. Kyllo v. Panzer, 535 N.W.2d 896, 897 (S.D.1995) (citing Poppen v. Walker, 520 N.W.2d 238, 241 (S.D.1994); Dahl v. Sittner, 474 N.W.2d 897, 899 (S.D.1991)). Review of the constitutionality of a statute is also de novo. Id. at 897-98 (citing Brown v. Egan Consol. Sch. Dist. 50-2, 449 N.W.2d 259, 260 (S.D.1989)).

[¶ 8] It is settled law that there is a strong presumption that a statute is constitutional and the party challenging the constitutionality of a statute has the burden of proving beyond a reasonable doubt that the statute is unconstitutional. Id. at 898 (citing Specht v. City of Sioux Falls, 526 N.W.2d 727, 729 (S.D.1995)).

DECISION

[¶ 9] 1. Whether Article III, § 1, of the South Dakota Constitution applies to sanitary districts.

[¶10] 2. Whether SDCL 9-1-K6) is an unconstitutional restraint on the ability to submit a sanitary district’s resolution to the initiative and referendum process.

[¶ 11] Because both of Beals’ arguments are so interrelated, they will be considered together.¹

[¶ 12] Beals argues that Article III, § 1, of the South Dakota Constitution contemplates and permits decisions of District to be subject to the initiative and referendum processes. That section of our constitution provides:

The legislative power of the state shall be vested in a Legislature which.shall consist of a senate and house of representatives. However, the people expressly reserve to themselves the right to propose measures, which shall be submitted to a vote of the electors of the state, and also the right to require that any laws which the Legislature may have enacted shall be submitted to a vote of the electors of the state before going into effect, except such laws as may be necessary for the immediate preservation of the public peace, health or safety, support of the state government and its existing, public institutions[J

... This section shall apply to municipalities. ... (Emphasis added.)

Beals argues District should be considered a “municipality” or a “municipal corporation.”

[¶ 13] There are many general definitions of a “municipality” or a “municipal .corporation.”

A municipal corporation is a body politic created by organizing the inhabitants of a prescribed area, under the authority of the legislature, into a corporation with all the usual attributes of a corporate entity, but

endowed with a public character by virtue of having been invested by the legislature with subordinate legislative powers to administer local and internal affairs of the community, and by virtue of its creation as a branch or agency of the state government to assist' in the administration of the government of the state. Another definition of a municipal corporation is that it is the body politic and corporate constituted by the incorporation of the inhabitants of a city, town, or village for the purposes of the local government thereof.

56 Am.Jur.2d Municipal Corporations, Counties, and Other Political Subdivisions § 4 (2dEd. 1971). Black’s Law Dictionary has a similar definition for “municipality.” It defines that term as:

A legally incorporated or duly authorized association of inhabitants of limited area for local governmental or other public purposes. A body politic created by the incorporation of the people of a prescribed locality invested with subordinate powers of legislation to assist in the civil government of the state and to regulate and administer local and internal affairs of the community.... A city, borough, town, township, or village.

Black’s Law Dictionary 1018 (6thEd. 1990) (citation omitted). .

[¶ 14] 'A “district” is typically considered to be something less than a municipality, as it is created and organized by the legislature and given certain limited powers to carry out a particular public purpose. 56 AmJur2d Municipal Corporations, Counties, and Other Political Subdivisions § 13 (2dEd. 1971). Districts are considered to be quasi corporations. See Frans v. Young, 30 Neb. 360, 46 N.W. 528, 529 (1890) (holding that a school district was a quasi corporation and not a municipal corporation); State v. Stewart, 74 Wis. 620, 43 N.W. 947, 948 (1889) (holding a drainage district is a quasi corporation); see also Town of Dell Rapids v. Irving, 7 S.D. 310, 315, 64 N.W. 149, 151 (1895) (describing a quasi corporation as: “Involuntary quasi corporations, such as counties, towns, and school districts, are created almost exclusively with a view to the policy of the state at large, for the purposes of political organization and civil administration[.]”) (citation and internal quotation omitted). It has even been specifically held that sanitary districts are quasi corporations.and do not rise to the level of a municipal corporation. Brownbriar Enters., Inc. v. City and County of Denver, 177 Colo. 198, 493 P.2d 352, 354 (1972); Martin Excavating, Inc. v. Tyrollean Terrace Water and Sanitation Dist., 671 P.2d 1329,1330 (Colo.Ct.App.1983).

[¶ 15] Beals argues the term “municipality” in Article III, § 1, of our constitution should be read broadly to cover entities such as sanitary districts. She cites to our case of Egan Indep. Consol. Sch. Dist. v. Minnehaha County, 65 S.D. 32, 270 N.W. 527 (1936), wherein we read the term “municipal corporation” broadly so as to include a school district. In Egan, it was recognized that the term “municipal corporation” is generally used in a strict sense, but that it can be interpreted broadly to embrace quasi corporations. Id., 65 S.D. at 36, 270 N.W. at 529. Article XI, § 5, of our constitution was being examined in Egan. It was decided that the term “municipal corporation” in that section was to be read broadly because, in § 10 of the same article, “cities, towns and villages” were referred to separately from “all municipal corporations.” Id. The court reasoned that, because only “cities, towns and villages” were given the power to tax for local improvements and “all municipal corporations” were given authority to tax for all corporate purposes, the phrase “municipal corporations” was not to be read strictly, and was to include more than “cities, towns and villages.” Id., 65 S.D. at 37, 270 N.W. at 530.

[¶ 16] Beals claims that provisions of the constitution should be read harmoniously and, since “municipal corporation” has been interpreted broadly in Article XI, the term “municipalities” should also be read broadly in Article III.

[¶ 17] Beals also claims that the definition in SDCL 9 — 1—1(6), which defines “municipal corporation” or “municipality,” is unconstitutional because it conflicts with our interpretation in Egan. Title 9 of our codified laws pertains to municipal government and section 9 — 1—1(6) of that chapter provides:

Terms used in this title, unless the context otherwise plainly requires, shall mean:

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(6) “Municipal corporation” or “municipality,” all cities and towns organized under the laws of this state but shall not include any other political subdivisions[.]

[¶ 18] In examining SDCL 9-l-l(6), we cannot' say that it is unconstitutional. Legislative acts are presumed to be constitutional. Poppen, 520 N.W.2d at 241. That presumption is not overcome until it is clearly and unmistakably shown beyond a reasonable doubt that the act violates constitutional principles. Id. Beals has failed to overcome this presumption. The legislature has a plenary power to classify and organize units of local government. S.D.Const.Art. IX, § l.² That is precisely what it has done in this situation. There is no indication that the term “municipality” is meant to apply to Article III, § 1, of the constitution. SDCL 9-1-1 specifically states that the definition applies to Title 9 of our codified laws. The legislature is not attempting to contradict the constitution and, therefore, this provision is constitutional. While this definition is not controlling, it does demonstrate the common definition of “municipality” and not the liberal interpretation that embraces quasi corporations. Also, as will be shown below, SDCL 9-l-l(6) does not contradict the interpretation of “municipality” in our constitution.

[¶ 19] Beals’ argument that, based on our decision in Egan, the term “municipality” or “municipal corporation” should be read broadly in our constitution, does not properly interpret the Egan holding. There it was recognized that other constitutional provisions did not include school districts as “municipal corporations” but, rather, followed a strict reading of the term. 65 S.D. at 37, 270 N.W. at 530.

[¶ 20] In Town of Dell Rapids, this Court held that the term “municipal corporations” as used in Article XVII, § 18, of the constitution was intended to be used in its restricted sense, “as applicable only to incorporated cities, towns or villages invested with the power of local legislation.” Id., 7 S.D. at 316, 64 N.W. at 151. It was determined that quasi corporations were not to be included as municipal corporations, because they are “mere political subdivisions of the state, having the powers expressly granted to them, and such implied powers as are necessary to enable them to perform their duties, and no more.” Id., 7 S.D. at 315, 64 N.W. at 151. The court also followed the strict reading of the word based on how it was used in other sections of the constitution. Id., 7 S.D. at 316, 64 N.W. at 151 (referring to Article XIII, and former Articles IX and X of our constitution).

[¶ 21] Likewise, in Sanders v. Indep. Sch. Dist. of City of Sioux Falls, 35 S.D. 48, 54, 150 N.W. 473, 475 (1915), the term “municipal corporation,” as used in Article X, § 1, of the constitution,³ was read strictly so as to exclude quasi corporations. This Court stated that “municipal corporations” only referred to cities, towns, and villages, and did not extend to school districts. Id., 35 S.D. at 53,150 N.W. at 474.

' [¶ 22] While Egan is authority for the proposition' that we should interpret the term “municipalities” in a broad sense, it is not dispositive of the issue. It seems our interpretations of the phrases “municipality” and “municipal corporations” has not been as uniform as Beals would argue. We, therefore, need to examine .the term “municipalities” in the context in which it is used in Article III, § 1.

[¶ 23] Based upon our review of Article III, § 1, we conclude that the proper construction to give the term “municipalities” is a strict one, excluding sanitary districts.⁴ This case differs from Egan, because there one sentence mentioned “cities, towns and villages” and the next referred to “all municipal corporations.” Here, other than the legislature, there is no mention of any other governmental bodies in Article III, § 1. Because the word “municipalities” appears plainly on its face, we must give it its ordinary and recognized meaning.

[¶ 24] Article III, § 1, was passed as chapter 39 of the 1897 Session Laws and contained the same phrase, “This section shall apply to municipalities,” as it does today. This amendment was approved by the voters in the November 8, 1898, election. The next time the legislature met was in 1899, and chapter 94 of the 1899 Session Laws is entitled “An Act to Provide for Carrying Into Effect the Amendment of section 1, Article 3, of the Constitution of the State of South

Dakota, Relating to the Initiative and Referendum as Applied, to Municipalities.” (Emphasis added.) Section 1 of that enactment is limited in application to “any city or town.” Section 10 of that enactment also only refers -to “any city or town.” This enactment was necessary to carry into effect initiative and referendum for municipalities as found in Article III, § 1. This indicates that the only definition ever intended to be given to the term “municipalities” in Article III, § 1, was a strict one applying only to cities and towns.⁵

[¶ 25] Similar support for the proposition that the term “municipalities” should be read narrowly can be seen in our opinion in Davenport v. Elrod. In that case we held:

The words and terms of a Constitution, like those of a statute, are to be interpreted and understood in their most natural and obvious meaning, unless the subject indicates or the text suggests that they have been used in a technical.sense. The presumption is in favor of the natural and popular meaning in which the words are understood by the people who have adopted them; and where the same words are used in different parts of a Constitution or statute they are presumed to have a uniform meaning throughout the instrument, but this does not necessarily follow.

20 S.D. 567, 574, 107 N.W. 833, 834 (1906) (citation and internal quotations omitted). Davenport held that the word “municipal,” as used in Article III, § 26,⁶ of our constitution,

was to be given its primary and popular meaning of only referring to the affairs of cities and towns. Id., 20 S.D. at 575, 107 N.W. at 834; see also Specht, 526 N.W.2d at 730-31 (defining the term “municipal func^ tion” in Article III, § 26). We further held in Davenport that “[i]t should be assumed that the language employed in so important an instrument would be selected with deliberation and due discrimination, to the exclusion of all unnecessary repetitions.” 20 S.D. at 575,107 N.W. at 834-35.

[¶ 26] To hold that the term “municipalities” should extend to quasi corporations such as sanitary districts would be inappropriate. Such a broad reading of that term in Article III, § 1, would conflict with how the legislature understood the term at the time the ameridmént was adopted, and with our decision in Davenport that the term “municipal” in Article III, § 26, should be strictly construed. Absent any indications to the contrary, the term should be given its plain and strict interpretation.

[¶ 27] Sanitary districts are legislatively created under Title 34A. They may be given several limited municipal powers to aid them in their defined purpose,⁷ however, they are not subject to .initiative and referendum. The special writing states that the legislature does not get to “pick and choose” which legislative bodies are subject to initiative and referendum, however, this position is erroneous. The initiative and referendum process is a power reserved to the people in regards to the legislature. This is not true for political subdivisions of the state. “In the absence of any explicit provision, whether a constitutional amendment confers upon the people of a political subdivision of the state the power of initiative and referendum as to local matters depends upon the terms of the amendment, and the question resolves itself into one of construction.” 42 Am.Jur.2d Initiative and Referendum, § 7 (2dEd. 1969). The Supreme Court of Arkansas, in interpreting its first version of an initiative and referendum amendment, held that it did not apply to municipalities and counties. Hodges v. Dowdy, 104 Ark. 583, 149 S.W. 656, 660 (1912). The court explained:

The amendment does not confer power. It reserves it. Now, the sovereign power rested, both before and since the adoption of this amendment, in the people of the ■ whole state. Power was delegated by the whole people to the General Assembly; but the purpose of this amendment was to reserve to themselves the legislative power. In other- words, they withdrew the exclusive legislative power theretofore delegated to the General Assembly, and reserved the right to exercise it themselves under certain conditions. The people of each municipality and county, never having possessed the sovereign legislative power, apart from the other people of the state, could not reserve such power. It could be conferred upon them by the people of the whole state; but they could not reserve that which they did not possess and had no power to take for themselves.

Id. (Emphasis added.) While Arkansas has since changed their amendment to include municipalities, this case does stand for the proposition that initiative and referendum are not inherent in all political subdivisions.

[¶ 28] Sanitary districts are not subject to initiative and referendum, however, should the legislature desire to provide sanitary districts with initiative and referendum, it arguably could do so. The special writing does not agree that the legislature is able to decide which political subdivisions can exercise initiative and referendum. This ignores the fact that the legislature has provided initiative and referendum for counties. See SDCL 7-18A-9 through 7-18A-24. We have even upheld the constitutionality of these statutes as applied to counties. Hofer v. Bd. of County Comm’rs, 334 N.W.2d 507, 509-10 (S.D. 1983).⁸ The legislature has also given some limited form of initiative and referendum power to school districts in SDCL 13-6-41 to -49, and to conservation districts in SDCL 38-8A-12. See Wyatt v. Kundert, 375 N.W.2d 186, 192 (S.D.1985); see also Lowe, Restrictions on Initiative and Referendum Powers in South Dakota, 28 S.D.L.Rev. 53, 54 (1982).

[¶ 29] Affirmed.

[¶ 30] AMUNDSON, KONENKAMP and GILBERTSON, JJ., concur. [¶ 31] SABERS, J., dissents and alternatively concurs in result.

1 . The special writing states that this case can be decided on different grounds and the constitutional issue should be avoided. However, this case cannot be decided on other grounds. Beals raised two issues on appeal: 1) Whether Article III, § 1, applies to sanitary districts; and 2) whether SDCL 9-1-1 (6) is unconstitutional. The first time the issue of whether accepting the bid was an administrative act was mentioned was in District's brief. It was submitted as an alternative argument should this Court find that Article III, § 1, does apply to sanitary districts. District did not file a notice of review on this issue so it is not properly before us. See Zoss v. United Bldg. Ctrs., Inc., 1997 SD 93, ¶20, 566 N.W.2d 840, 846 (holding, "[w]e have consistently held ... that failure to timely file a notice of review constitutes a waiver."); State v. Vandergrift, 1997 SD 5, ¶ 8/558 N.W.2d 862, 864 (declining to consider an issue raised by appellee because no notice of review was filed); Hisgen v. Hisgen, 1996 SD 122, ¶ 11, 554 N.W.2d 494, 498 (holding: "[Ap-pellee] did not file a notice of review, so the issue is not preserved and we will not address it.").

This issue should also not be addressed by this Court because the court below did not rule on it. District raised the issue in its Answer to Application for Writ of Mandamus as an alternative to the constitutional issue. The court did not need to rule on it because it found in District’s favor on the constitutional issue. See Vanderwerff Implement, Inc. v. McCance, 1997 SD 32, ¶ 18, 561 N.W.2d 24, 27 (holding: "As we have stated numerous times, 'issues not addressed or ruled upon by the trial court will not be addressed by this Court for the first time on appeal.' ”).(citations omitted). Therefore, the legal doctrine of judicial restraint dictates we must decide the constitutional issue because it is the only issue properly presented for our review.

2 . Article IX, § 1, provides: "The legislature shall have plenary powers to organize and classify units of local government, except that any proposed change in county boundaries shall be submitted to the voters of each affected county at an election and be approved by a majority of those voting thereon in each county. No township heretofore organized may be abolished unless the question is submitted to the voters of the township and approved by a majority of those voting thereon in each township.”

3 . Article X was repealed in 1972 and its provisions were modified and combined with Article IX. Article X, § 1, previously read: "The legislature shall provide by general laws for the organization and classification of municipal corporations. The number of such classes shall not exceed four, and the powers of each class shall be defined by general laws, so that no such corporations shall have any powers, or be subject to any restrictions other than those of all corporations of the same class[.]”

4 . The special writing cites to State ex rel. Wegner v. Pyle, 55 S.D. 269, 271, 226 N.W. 280, 281 (1929), for the proposition that the language in Article III, § 1, "leaves no room for construction either strict or liberal.” However, that case is distinguishable because it decided whether a certain law should be subject to referendum, not whether the constitution allows for a particular entity to exercise initiative and referendum.

5 . The special writing argues that "[i]t is of no moment that 'sanitary districts’ may have been unknown to the framers of our constitution.” It claims the language of the constitution is generally extended " 'to include new things and new conditions of the same class as those specified which were not known .or contemplated when it was adopted.' " (Citation omitted.) This may be true, however, while sanitary districts may not have been around in the late 1800s, other political subdivisions were, yet were specifically not included in Article III, § 1. See Town of Dell Rapids, 7 S.D. at 315, 64 N.W. at 151 (holding, three years before Article III, § 1, was voted on, that "school districts” and other "quasi corporations" were not municipal corporations as used in Article XVII, § 18, of our constitution).

6 .. Article III, § 26, provides: "The legislature shall not delegate to any special commission, private corporation or association, any power to make, supervise or interfere with any municipal improvement, money, property, effects, whether held in trust or otherwise, or levy taxes, or to select a capital site, or to perform any municipal functions whatever.”

7 . SDCL 34A-5-31 provides thait certain aspects of municipal law shall apply to sanitary districts. However, of the sections mentioned, the procedures for initiative and referendum are not included. Such a grant of limited municipal functions is completely consistent with the quasi corporation concept, and does not convert a quasi corporation into a municipal corporation. See Town of Dell Rapids, 7 S.D. at 315, 64 N.W. at 151 (noting that quasi corporations are granted some municipal corporation functions, and have some implied powers, but such are only granted to enable them to perform their public duties and not to make them actual municipal corporations).

8 . The special writing cites to Hofer, 334 N.W.2d at 509-10, as support for its position. However, all Hofer stood for was that while Article III, § 1, does not mention counties, it also does not limit the legislature’s ability to grant initiative and referendum to counties through statutes. The legislature may someday enact statutes granting initiative and referendum to sanitary districts, however, it has not done so, and there is also nothing in our constitution that grants those powers to sanitary districts.