{ "id": 1467048, "name": "Portis v. Board of Public Utilities, Lepanto; Lepanto v. Goldsby", "name_abbreviation": "Portis v. Board of Public Utilities", "decision_date": "1948-04-05", "docket_number": "4-8438", "first_page": "201", "last_page": "208", "citations": [ { "type": "official", "cite": "213 Ark. 201" }, { "type": "parallel", "cite": "209 S.W.2d 864" } ], "court": { "name_abbreviation": "Ark.", "id": 8808, "name": "Arkansas Supreme Court" }, "jurisdiction": { "id": 34, "name_long": "Arkansas", "name": "Ark." }, "cites_to": [ { "cite": "212 Ark. 822", "category": "reporters:state", "reporter": "Ark.", "case_ids": [ 1470410 ], "weight": 2, "opinion_index": 0, "case_paths": [ "/ark/212/0822-01" ] }, { "cite": "171 U. S. 48", "category": "reporters:federal", "reporter": "U.S.", "case_ids": [ 3600877 ], "weight": 3, "pin_cites": [ { "page": "p. 734" } ], "opinion_index": 0, "case_paths": [ "/us/171/0048-01" ] }, { "cite": "204 Ark. 147", "category": "reporters:state", "reporter": "Ark.", "case_ids": [ 1444199 ], "weight": 2, "opinion_index": 0, "case_paths": [ "/ark/204/0147-01" ] }, { "cite": "27 L. Ed. 669", "category": "reporters:federal", "reporter": "L. Ed.", "case_ids": [ 3502670, 3502031 ], "opinion_index": 0, "case_paths": [ "/us/108/0109-01", "/us/108/0110-01" ] }, { "cite": "2 S. Ct. 366", "category": "reporters:federal", "reporter": "S. Ct.", "opinion_index": 0 }, { "cite": "108 U. S. 110", "category": "reporters:federal", "reporter": "U.S.", "case_ids": [ 3502031 ], "opinion_index": 0, "case_paths": [ "/us/108/0110-01" ] }, { "cite": "243 S. W. 57", "category": "reporters:state_regional", "reporter": "S.W.", "opinion_index": 0 }, { "cite": "154 Ark. 471", "category": "reporters:state", "reporter": "Ark.", "case_ids": [ 1361190 ], "opinion_index": 0, "case_paths": [ "/ark/154/0471-01" ] }, { "cite": "172 S. W. 843", "category": "reporters:state_regional", "reporter": "S.W.", "opinion_index": 0 }, { "cite": "116 Ark. 125", "category": "reporters:state", "reporter": "Ark.", "case_ids": [ 1532248 ], "opinion_index": 0, "case_paths": [ "/ark/116/0125-01" ] } ], "analysis": { "cardinality": 626, "char_count": 13689, "ocr_confidence": 0.507, "pagerank": { "raw": 8.643900182196183e-08, "percentile": 0.49120798162363905 }, "sha256": "bd04d407c73c4bd8025c98230c0da318b3cdc47208ce238e5ce9aafe97b8bea2", "simhash": "1:ae26c018a62fe35b", "word_count": 2354 }, "last_updated": "2023-07-14T14:58:24.264428+00:00", "provenance": { "date_added": "2019-08-29", "source": "Harvard", "batch": "2018" }, "casebody": { "judges": [], "parties": [ "Portis v. Board of Public Utilities, Lepanto. Lepanto v. Goldsby." ], "opinions": [ { "text": "Holt, J. Lepanto,\nArkansas, is an incorporated town, owning its water and sewer systems (originally constructed by. improvement districts), which are now free of all debts.\n- Proceeding under Act 95 of the Acts of the Legislature of 1939, a Board of Public Utilities was created and at all times since its creation, has had the sole and exclusive control of the maintenance, enlargement and operation of the water and sewer systems of Lepanto. Finding it necessary to enlarge and extend the two systems, proceedings were begun by the Board of Public Utilities (hereinafter called the Board) to use $2,532.45 of revenues in its hands, and by resolution, said Board sought to issue revenue bonds in the amount of. $80,000 to make these improvements.\nAt the same time proceedings were instituted, before the Town Council of Lepanto (hereinafter called the Town), and an ordinance was enacted to accomplish the same purpose as that undertaken by the Board.\nFor the purpose of determining whether the authority to issue the proposed bonds was vested in the Board or in the Town, T. B. Goldsby, a property owner, filed suit against the Town and its officers, and D. F. Portis, another property owner, filed a separate suit against the Board. In each of said suits it was sought to enjoin the issuance of the bonds.\nGoldsby, in his complaint, alleged, in effect, that the power to issue the bonds rested with the Board of Utilities and not with the Town. The Town\u2019s answer was, in effect, a denial that it did not have the authority to issue the bonds. A demurrer to this answer was sustained. The Town elected to stand on its answer, whereupon the court entered .its decree granting the injunctive relief prayed and the Town has appealed.\nPortis\u2019 action was against the Board of Public Utilities of Lepanto, Arkansas, and he alleged, in substance,\u2019 that the power to issue the revenue bonds in question rested with the Town of Lepanto and not with the Board. The Board answered and in effect denied that it did not have the authority to issue the bonds. A demurrer to this answer was filed and overruled, whereupon the plaintiff, Portis, elected to stand upon his demurrer, refused to plead further, the court dismissed his complaint for want of equity and he has appealed.\nThe causes were consolidated by the trial court.\nOn this appeal, the question presented is whether the Board of Public Utilities of the incorporated town of Lepanto, Arkansas, or the Town Council\u2019 of Lepanto had the right to issue revenue bonds, secured by a pledge of future revenues to pay for certain improvements and extensions to the water and sewer systems of said incorporated town, both of which are now operated by the Board of Public Utilities, and free of debt.\nWe have reached the conclusion, for the reasons presently to be pointed out, that the sole authority to issue the revenue bonds, here in question, rested with the incorporated town of Lepanto and not with the Board of Utilities.\nIt is undisputed that until the enactment of Act 95 of 1939, the power to issue these revenue bonds was in the Town under Acts 3 31 and 132 of 1933, and unless this authority has been taken away from the Town and given to the Board, by Act 95, then the power to issue the bonds must, and does, remain in the Town.\nAmong the provisions of Act 95 are the following: Section 1 provides that the Board of Public Utilities \u201c . . . have the sole and exclusive control of the maintenance, enlargement and operations of such plants, subject to the following provisions and conditions; provided this Act shall not apply to such Districts that have outstanding bonds unpaid.\u201d\n\u201cSection 4. Said Board of Public Utilities may, in their discretion, from time to time, make such enlargement or enlargements of said plants and systems and such extensions of the lines thereof as may be necessary to serve the residents of said city or town with electric lights, electric power, water or sewerage, whether the area to be so serviced shall be included in any such improvement district or not; provided, that no additional tax shall be levied upon the property within such improvement district or districts, but the funds for such purpose may be contributed in whole or in part by outside agencies, or by the persons to be benefited, or in the discretion of the Board, may be taken from the net revenue coming into its hands.\u201d\n\u201cSection 25. \u25a0 Said Board of Public Utilities shall have the right to fix the rates to be charged for the service to be rendered by any and all plants or sewerage systems under its jurisdiction and may do and perform all things necessary to enforce the collection of the same and shall do any and all things necessary to the successful operation and maintenance of said electric light plants, water plants or sewerage systems.\u201d\n\u201cSection 28. Any profits derived by any of the Boards of Public Utilities created under this Act, after there has been set aside from the earnings a sum sufficient to pay all outstanding indebtedness of the plants or sewerage systems under the control of said Board and a sum sufficient to provide for expenses, extensions and enlargements found necessary, or which may be reasonably anticipated, shall be used by said Board to retire any outstanding Bonds or interest thereon issued by any of the Boards of Improvement of the Districts constructing the plants under its control. And in case there are no such outstanding bonds or interest or when all of such outstanding Bonds and interest thereon shall have been paid such profits shall be paid to the Treasurer of the City or Town wherein such Board is created to be by the Board of Aldermen of said City or Town used to defray any expense or pay any debt of said City or Town. \u2019 \u2019\nWe have found no provision whatever in Act 95, which by express words, by implication, or otherwise, gives to the Board the authority which it claims, to issue-these bonds.- Had the Legislature desired, or intended, that the Board should have such power, it would have been an easy matter to have expressly so provided in the Act, and this it did not do.\nThe general rule is well established that municipal corporations, or their officers, departments or subdivisions are c reatures of the statute and possess and can exercise only such powers as are granted in express words by such statute, or those necessarily or fairly implied, or incident to the powers expressly conferred, or those powers which are essential or indispensable to the accomplishment of the declared purposes of the corporation.\nIn Bain v. Fort Smith Light & Traction Company, 116 Ark. 125, 172 S. W. 843, L. R. A. 1915D, 1021, this court said: \u201cA municipal corporation has no powers except those expressly conferred and those fairly implied for the attainment of declared purposes,\u201d and in Cumnock v. City of Little Rock, 154 Ark. 471, 243 S. W. 57, this court said: \u201cIn Ottawa v. Carey, 108 U. S. 110, 2 S. Ct. 366, 27 L. Ed. 669, the Supreme Court of the United States, speaking through Chief Justice Waite said: \u2018Municipal corporations are created to aid the State Government in the regulation and administration of local affairs. They have only such powers of government as are expressly granted them, or such as are necessary to carry into effect those that are \u25a0 granted. No powers can be implied except such as are essential to the objects and purposes of the corporation as created and established. 1 Dill, \u00f3n Mun. Corp., 3 Ed., par. 89, and cases there cited. To the extent of their authority they can bind the people and the property subject to their regulation and governmental control by what they do, but beyond their corporate powers their acts are of no effect.\n\u2018 \u2018 On the same point in Dillon on Municipal Corporations, 5th Ed. vol. 1, par. 237 (89), it is said: \u2018It is a general and undisputed proposition of law that a municipal corporation possesses and can exercise the following powers, and no others: First, those granted in express words; second, those necessarily or fairly implied in or incident to the powers expressly granted; third, .those essential to the accomplishment of the declared objects and purposes .of the corporation, not simply convenient, but indispensable. Any fair, reasonable, substantial doubt concerning the existence of power is resolved by the courts against the corporation, and the power is denied. \u2019\n\u201cThe principle laid down above is one of universal application throughout the United States and has been recognized and applied by this court in several cases according to the particular facts of each case. \u2019 \u2019 See, also, Bennett v. City of Hope, 204 Ark. 147, 161 S. W. 2d 186.\nIn Detroit Citizens\u2019 St. Ry. Co. v. Detroit Ry., 171 U. S. 48, 18 S. Ct. 732, at p. 734, 43 L. Ed. 67, the Supreme Court of the United States announced the rule in this language: \u201cThe power, therefore, must be granted in express words or necessarily to be implied. . . . Municipal corporations possess and can exercise only such powers as are \u2018granted in express words, or those necessarily or fairly implied, in or incident to the powers expressly conferred, or those essential to the declared objects and purposes of the corporation, not simply convenient, but indispensable.\u2019 . . . This would make \u2018necessarily implied\u2019 mean inevitably implied. The Court of Appeals of the Sixth Circuit, by Circuit Judge Lurton, adopts Lord Ilardwieke\u2019s explanation, quoted by Lord Eldon in Wilkinson v. Adam, 1 Ves. & B. 422, 466, tbat \u2018a necessary implication means not natural necessity, but so strong a probability of intention, tbat an intention contrary to tbat, wbicb is imputed to tbe testator, cannot be supposed.\u2019 \u201d\nIn the circumstances here, it cannot be logically or successfully contended tbat tbe power of tbe Board to issue tbe bonds was a necessary or indispensable one for tbe reason tbat tbe Town bad ample power to issue tbe bonds under Acts 131 and 132 of 1933, supra, and as indicated, tbis power was not taken away from tbe Town by Act 95.\nOf strong significance is tbe fact tbat tbe Legislature refused to grant to tbe Board tbe right to use tbe profits of these plants for tbe security of future bond issues, but specifically directed (\u00a7 28, supra,) tbat such profits should be paid to tbe Treasurer of the City or Town, wherein such Board is created, to be \u2018 \u2018used to defray any expense or pay any debt of said City or Town.\u201d\nClearly we think it was tbe intention of tbe Legislature under Act 95 tbat Cities or Towns should still have tbe sole right to issue bonds under Acts 131 and 132 of 1933, supra, and realizing tbat municipalities would need tbe revenues from these plants to secure any bonds tbat might be issued by tbe municipalities, themselves, and for other purposes, the Legislature intended tbat tbe sole power to issue such revenue bonds should rest with tbe municipality.\nOf much significance also is the following provision in \u00a7 29, supra, wbicb specifically denies to tbe Board tbe right to mortgage or create a lien upon tbe plants under its control. \u201cNo Board of Public Utilities created under tbe terms of tbis Act shall ever have tbe right to sell, mortgage, or create any lien whatsoever upon any of tbe plants under its jurisdiction, etc. \u2019 \u2019\nIt must also be noted tbat no additional tax could be levied upon tbe property within tbe improvement district to pay for any enlargements or extensions. Section 4, supra, so provides. Thus clearly it appears from the provisions of \u00a7 4 that three methods were provided for funds by which the Board might pay for any enlargements or extensions of the two systems under its control. First, such \u201cfunds . . . may be contributed in whole or in part by outside agencies,\u201d such as federal grants, gifts, or aid from the municipality from funds on hand or from a revenue bond issue. Second, by contributions from \u201cpersons to be benefited.\u201d By this the clear intention seems to be, while no tax could be levied to make the improvements, yet if the property owners, desiring them, desired to pay the costs themselves, the Board was empowered to accept such contributions for the purpose of making the improvements, and third, the Board in its discretion, may take funds \u201cfrom the net revenue coming into its hands \u2019 \u2019 to make the' improvements.\nIn short, we hold that Act 95, supra, did not confer upon the Board of Utilities here the power to issue revenue bonds; that, being a creature of the statute, the Board had only such powers as were expressly, or impliedly given to it by the Legislature, and that it was the clear intent of the lawmakers that only one municipal authority, the municipality itself, should have the power to issue these revenue bonds.\nSince, however, \u00a7 1 of Act 95 specifically provides that the Board was \u201cto have the sole and exclusive control of the maintenance, enlargement and operations of such plants,\u201d the water and sewer systems, it would be appropriate for the Board, when it has determined that it would be to the interest of the Town to enlarge or extend these systems, which improvements it is unable to make out of the revenues in its hands, to make this fact known to the Council of the Town of Lepanto with its (Board\u2019s) recommendation and request that the Town take the necessary steps to issue and sell revenue bonds to secure the funds for the Board to enable it to make the proposed improvements.\nAccordingly, the decree is reversed with directions to proceed in a manner not inconsistent with this opinion.\nSee 212 Ark. 822, 208 S. W. 2d 772.", "type": "majority", "author": "Holt, J. Lepanto," } ], "attorneys": [ "John S. Mosby, for appellee.", "Willis Townsend, arnicas curiae." ], "corrections": "", "head_matter": "Portis v. Board of Public Utilities, Lepanto. Lepanto v. Goldsby.\n4-8438\n209 S. W. 2d 864\nOpinion delivered April 5, 1948.\nJohn S. Mosby, for appellee.\nWillis Townsend, arnicas curiae." }, "file_name": "0201-01", "first_page_order": 217, "last_page_order": 224 }