noting the court's statement, in dictum, in Adams v. Bryant,236 Ark. 859, 370 S.W.2d 432 (1963), that the prohibition of art. 12, § 5 applied to the Clarksville Light and Water Commission, and commenting: "But plainly the . . . Commission was the arm of the municipal government of Clarksville and was subject to its control."
How later courts described this case
- noting the court's statement, in dictum, in Adams v. Bryant,236 Ark. 859, 370 S.W.2d 432 (1963), that the prohibition of art. 12, § 5 applied to the Clarksville Light and Water Commission, and commenting: "But plainly the . . . Commission was the arm of the municipal government of Clarksville and was subject to its control."
- noting the court's statement, in dictum , in Adams v. Bryant , 236 Ark. 859 , 370 S.W.2d 432 (1963
- acknowledging as the "rationale" for a statute allowing lease to a hospital corporation "the obvious benefits which accrue to a community from the availability of hospital services"
Written by the judges who cited it.
The opinion
Darrell Hickman, Justice, dissenting.
I disagree with the majority because I think the hospital is an arm of the city and is, therefore, prohibited from those activities in which the city may not engage. The city may not operate a laundry and compete with private firms and neither may the city’s hospital.
The hospital in this case is a public, not private, hospital in Conway, Arkansas. The city apparently built it, or acquired it. Such ownership is expressly permitted. Amendment 32 to the Arkansas Constitution titled “County or City Hospitals” provides for taxes to support such “public” hospitals. Ark. Stat. Ann. § 19-4713 (Repl. 1980) also provides that cities can own hospitals.
The Arkansas Constitution recognizes other endeavors that might otherwise be considered private endeavors. For example, Amendment 49 to the constitution provides for the issuance of bonds after an election for securing and developing industry. The amendment was necessary perhaps not just to expressly provide for taxing or bonded indebtedness, but also to overcome other provisions of the constitution which limit and define public endeavors. See Ark. Const. Art. 16 as amended by Amend. 13.
At the same time Article 16 provides: “No municipality shall ever grant financial aid toward the construction of railroads or other private enterprises operated by any person, firm or corporation, . . .” (Italics supplied.)
Other relevant provisions on the use of municipal credit and property bear mentioning. The first sentence of Amendment 13 reads: “Neither the State nor any city, county, town or other municipality in this State, shall ever lend its credit for any purpose whatever . . .”
Article 12, Section 5 reads: “No county, city, town or other municipal corporation shall become a stockholder in any company, association or corporation; or obtain or appropriate money for, or loan its credit to, any corporation, association, institution or individual.”
Under these provisions, Conway may not own or participate in the ownership of this commercial laundry. The majority says this is not the city’s hospital and that it belongs to the nonprofit corporation. What then is the purpose of the corporation — to run someone else’s hospital? It is still a public hospital — Conway’s public hospital. The city owns the hospital, that is not denied. The hospital owns all the stock in the laundry; the hospital owns the land, building, equipment, and eight vehicles used by the laundry. The board members of the hospital are the board members of the laundry. It does not take a large step in logic to realize that the city, in fact, owns the laundry. But the majority prefers to ignore such logic.
We might as well say this nonprofit corporation could convert itself into a corporation for profit and take over any private endeavor. What the city may not do directly, it may not do indirectly. Adams v. Bryant, 236 Ark. 865 , 370 S.W.2d 432 (1963); Talbert v. Helena-West Helena Industrial Development Corp., 226 Ark. 620 , 291 S.W.2d 802 (1956).
The majority’s holding means that this corporation can, under the scheme approved in this case, enter into any private business, a dry goods store, a drug store, or even a dress shop. It would be better to simply hold, as the constitution states clearly in several places, that the city cannot directly, or through its agencies, operate a private business, unless that endeavor has express constitutional sanction.
In Lord v. Denver, 58 Colo. 1 , 143 P. 284 (1914), acity bond issue was considered which would aid a railroad. The court found no authority that even hinted that “ . . . it is within the ordinary powers of a municipal corporation to construct an improvement, convenience, or necessity with the avowed and declared purpose of selling the same or an interest therein to a private person or corporation.” This seems to be repugnant to every conception of the term “municipal purpose.” The majority would like to alter the facts and find the laundry is not commercial, or a corporation for profit. That is, of course, an impermissible act on their part.
There is no reason to add to the blur that exists between what is a public and a private endeavor; running a commercial laundry is not a public endeavor.