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insurance above referred to is legal the insurance independently of the and within the powers of the city, city. then the court is asked to decree that For the complainants it is consaid Bank of Commerce & Trust tended that the city was without Company, as trustee, pay to the power and authority to appropriate Equitable Life Assurance Society funds received from the sale of wathe insurance premiums in its pos- ter to pay premiums on said policies session under said trust agreement, of insurance, and they rely upon the and pay to the beneficiaries or to the following provisions of the Constiwater department of the city of tution of Tennessee, to wit: Art. 1, Memphis for the benefit of the $ 21, art. 2, § 28, art. 2, § 24, art. 1, beneficiaries entitled thereto any Š 8, and art. 11, § 8. amounts paid by said assurance so- Without copying the foregoing ciety to said trustees on account of sections of the Constitution into this the death of or injury to any of the opinion, it might be said that, in reemployees covered by said insur- lying upon all of said provisions, the ance.

complainants make the one point "Signed at Memphis, Tennessee, that the application of said funds by this 25th day of May, A. D. 1922." the water department to the payThe certificate issued by the in

ment of said premiums of insurance surance company for each employ

is an appropriation of public funds

for a private purpose. ee, and delivered by the water com

Since it is conceded by counsel for pany to each employee, contains the

the defendants that the operation of following recital:

said water plant is a public function, "To Employees of the Memphis Ar- and that the money received for watesian Water Department:

ter is a public fund, it will not be “This certificate of insurance

necessary to discuss our cases bearcomes to you without charge, and, in ing upon this question. the event of your death while in the

It is contended by the complainemploy of this department, your ants that this action of the city canbeneficiary will be paid the amount not be sustained under the police of this certificate plus such addition

power provision of the Constitution, al amount for each year of service it being contended that the issuance as is indicated on the table printed of said policy and the payment of on the opposite page.

the premium therefor have no rela"Recognizing our mutuality of in- tion, either directly or indirectly, to terests, we hope many may obtain the improvement of the public through this insurance a provision health, the public morals, or the genfor those dear to them, which might eral welfare of either the state or otherwise be expensive, or perhaps, the city of Memphis. in some cases, impossible.

Upon the other hand, it is insisted “Yours very truly,

by the defendants that by this com"Memphis Artesian Water De- paratively small appropriation the partment,

city is better enabled to retain "by Sanford Morison, Secre- skilled employees in its service, and tary."

is thereby better capacitated to furUpon an employee leaving the

nish the inhabitants of the city at all

times with an adequate supply of service of the water department, the

pure, wholesome water. insurance as to him terminates, but

While some criticism is made as he may, without examination as to

to the interpretation of certain procondition of health, moral standing,

visions of the stipulation relative to etc., procure insurance of a like

the beneficial results experienced by amount by paying the extra pre- the city as a result of investing in mium provided therefor to the in- said group insurance, we are of the surance company, and thus continue opinion that, taking the agreement (- Tenn. —, 251 8. W. 46.) as a whole, it must be, at least, as- concerned with the policy of the sumed that in the judgment of the governing authorities of our mucommissioners better and more effi- nicipalities, the foregoing obsercient service has resulted on the part vation meets the argument that of the employees, and that they are if this action is sustained all other better satisfied, and are more likely municipalities will adopt this polto remain in the employ of the city. icy. To this there can be no obThe right to fix the wages of em- jection, if, as an economic measployees inheres in the city, and ure, it is to the best interest of when, in its judgment, conditions the municipalities to adopt it. justify an increase in wages, it has There is no law requiring municipalthe power to authorize such in- ities to provide its employees with crease. The act under which the such insurance, and it will not be water department functions author- presumed that they will do so unizes the city to fix the compensation less they receive a benefit thereof its employees.

from; and should it fail to produce In 28 Cyc. 601, it is said: “Un- the anticipated results, it can be disless such change is prohibited by continued at any time. Certainly the Constitution, statutes, or charter such an investment is of benefit to provisions, the power vested in a the wage earner. Ordinarily the municipal board or officer to fix the wages of such an employee are incompensation of a municipal agent sufficient to enable him to adequately or employee generally includes the provide for his family after death. power to increase or reduce the sal- In this case, the family of John Wilary or wages of such agents or em- ton, a valued employee of the city, ployees.”

will receive $2,000, which may prove It could hardly be contended but a very present help in time of need. that the governing powers would This system may not only provide have the right to increase the an- better service and more wholesome nual wages of each employee of the water, but it may relieve the city and water department $18 per annum, if county of the expense of caring for justified by existing

by existing conditions. dependent families of deceased emThis, in effect, is what it did when ployees. it took out said policy of group in- Upon the principle here involved surance, but from an economic basis —that is, of better and continued it concluded that better results service, and more wholesome water would be obtained as to both parties - various courts have sustained by investing it in insurance instead statutes requiring cities to pension of paying the money to the em- firemen and policemen. Such an act ployee. Ordinarily, what can be was sustained in State ex rel. Haberdone indirectly can be done directly. lan v. Love, 89 Neb. 149, 34 L.R.A. If a city can increase the wages of (N.S.) 607, 131 N. W. 196, Ann. its employees, why not invest the in- Cas, 1912C, 544, the court saying: crease in insurance for them, in- “A firemen's pension may be classistead of paying it to them direct, fied as part of his compensation for if, by so doing, they are better satis- services rendered, or it may be said fied and the city obtains better that it is paid to him for the purpose service?

of stimulating all those engaged in The large enterprises of this coun- a like public duty to prevent and try have reached a wonderful condi- suppress the destruction of property tion of economic efficiency, and, ac- and the loss of human life incident cording to the stipulation, they are to those conflagrations which the adopting the group insurance sys- utmost vigilance may minimize, tem for the benefit of their em- but cannot entirely prevent, in popployees. If it is beneficial to them, ulous cities. Within whichever why would it not be beneficial to our class the pension may fall, public municipalities? While we are not funds may be appropriated in con

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formity with legislative authority to ground that they prevent dependpay the fireman, and the money is ency and destitution. thereby expended for a public pur- The policy in question provides inpose.” Further on in the opinion surance for the widows and children the court said: "In applying these of deceased employees, and prevents limitations to the instant case, it dependency and destitution, and to may be conceded that the pension this extent is related to the mothers' forms an inducement to the individ- pension acts. ual to enter and remain in the serv- In a sense the Workmen's Comice of the fire department, and that pensation Act (Pub. Laws, chap. the pension, in a sense, is part of 123), which was sustained by this the compensation paid for those court in Scott v. Nashville Bridge services.'

Co. 143 Tenn. 86, 223 S. W. 844, is McQuillin, in his work on Mu- analogous, for it recognizes the nicipal Corporations, § 2169, says: right of a municipality to carry in"On the other hand, municipal ap- surance upon the lives of its empropriations to a fireman's relief as- ployees. sociation have been held proper, and In holding that the city of Nasha municipality may appropriate ville could lawfully subscribe to money to a corporation to create a stock in the Nashville & Chattafund to pension police officers, since nooga Railroad, this court, in Nichol this is a strictly municipal use. So, v. Nashville, 9 Humph. 252, said: a municipality may pension police. "What is a corporation purpose of men, where injured, or after a cer- the town of Nashville? General tain period of service. So, aid to definitions are always difficult to be a college, and appropriations for in- given with precision and accuracy, corporated homes for friendless especially where they have to women, or for industrial expositions, cover as extensive ground as that or to secure the location near the embraced by the expression, 'corcity of a state reform school to poration purposes.' I shall not, which it may send its youthful of. therefore, attempt to specify what fenders, have been held proper. are corporation

purposes of the city Sending the Liberty bell to an ex- of Nashville. They are, or may be position has been held a proper ex- made to be, as numerous and diverpenditure, as has the repaying prop- sified as may be found requisite by erty owners for pipe laid with the experience to promote the peace understanding that the municipality health, comfort, and prosperity of would refund the costs."

its corporators, and anything which In Com. ex rel. Philadelphia Po- promotes these things is or may be lice Pension Fund Asso. v. Walton, constituted a legitimate corporate 182 Pa. 373, 61 Am. St. Rep. 712, purpose. Perhaps I might divide 38 Atl. 790, the court said: "A judi- corporate purposes into two classes ciously administered pension fund is --those which are direct, and those doubtless a potent agency in secur- which are indirect. A direct coring and retaining the services of the porate purpose might be styled to most faithful and efficient class of be one which, in its direct and immen connected with that arm of the mediate consequences, operates upmunicipal service in which every on the interests of the corporation. property owner and resident of the Such would be all police regulations city is most vitally interested. Rea- for the government of the town, the sons in support of this proposition promotion of good order, the proneed not be stated in detail. They tection of its citizens from the laware such as readily suggest them- less, the suppression of vice, the selves to every reflecting mind.” opening and preservation of high

The constitutionality of mothers' ways, streets, and alleys, the erecpension acts have generally been tion of market houses and hospitals, sustained by the courts, upon the supplying the town with water, etc.

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(-- Tenn. 251 S. IV. 16.) An indirect corporate purpose might universally recognized as impressed be styled to be one which does not, with a public use, were nonexistent in its direct and immediate conse- a few years ago.' quences, operate upon the corpora- The foregoing excerpts from the tors, but the beneficial effects of decisions of this court (and many which are to be experienced in a others could be cited to the same efremoter degree, and which have to fect) indicate that this court has folbe traced to their source before they lowed a liberal and progressive polcan be duly comprehended and ap- icy in dealing with this question, preciated.” And later on in the and has refused to interfere with opinion, in discussing the construc- the discretion of the governing tion to be given the power vested in powers of the municipality in such the city, the court said: “But this matters, except where there has strict construction has never con- been an abuse of discretion. fined the execution of the power to The exact question here involved its word and letter, but everything has been passed upon by only one necessary and proper for carrying state court of last resort, so far as into execution the granted power we are aware. In Nohl v. Board of has always been conceded by the Education, 27 N. M. 232, 16 A.L.R. strictest constructionist."

1085, 199 Pac. 373, there was inIn East Tennessee University v. volved the validity of a contract of Knoxville, 6 Baxt. 166, this court group insurance upon the lives of said: “The principle that governs teachers in the public schools of Alin determining whether an appro- buquerque. The court sustained the priation is for a corporation pur right to insure, and said: “The expose, or not, may be clearly illustrat penditure of public funds raised by ed by reference to what corporations taxation or other methods for pubmay do in the preservation of

of lic purposes must necessarily be inhealth of their inhabitants. The - trusted by the legislature to the pubpreservation of health is universally lic agencies, and these agencies are conceded to be a legitimate corpora- required to exercise discretion and tion purpose.

To carry out the judgment in determining the purpower to preserve the health of a pose for which such money will be city, money may be appropriated to spent, within the limits of the ausecure a constant supply of whole- thority granted, and courts will not some water; hence, waterworks out interfere, unless there is a clear deside of the city, from which good parture from the legislative authorwater may be conveyed into the city, ity. In the management and conmay be erected and operated, either duct of public schools of the state the in whole by the city, or in connec

school authorities are called upon to tion with others. In like manner, it determine the objects and purposes is now well understood that public for which the school funds shall be parks in the vicinities of cities con- expended, within the limits of the tribute essentially to the health and authority granted, which will prove comfort of their inhabitants, and beneficial to and promote the interhence money may be legitimately ests of education, and to expend appropriated for these purposes. money daily for such purposes. So, likewise, as to the erection of "It is admitted that the securing hospitals and pesthouses outside of of group insurance for the teachers a city."

enables the board of education to In Ryan v. Louisville & N. Ter- procure a better class of teachers, minal Co. 102 Tenn. 111, 45 L.R.A. and prevents frequent changes in 303, 50 S. W. 744, the court said: the teaching force. This is certainly “The term “public use' is a flexible desirable and conducive to the ‘propone. It varies and expands with the er conduct of the public schools.' growing needs of a more complex School funds are now being spent in social order. Many improvements, all the school districts of the state,

27 A.L.R.-80.

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and in many, if not all, of the objects which have no relation to other states, for purposes and ob- the public schools. This cannot be jects unquestionably proper, gauged said in this case. ” by our advancing civilization, which The question was again before the a quarter of a century ago would supreme court of New Mexico in the have been considered highly im- case of Bowers v. Albuquerque, 27 proper. In many of the schools we N. M. 291, 200 Pac. 421, involving have mechanical instruction in many the carrying of group insurance on of the trades and professions, which employees of the city, and upon the not so many years ago would not authority of the previous case the have been tolerated. The teaching court upheld the right. of music, arts, and science has be- A similar question was held income a recognized necessity. Many valid by a judge of an inferior court things are provided now for the in New York, but in the court of comfort and convenience of both appeals his action was not passed teachers and pupils, which hereto- upon, the court saying: “No quesfore would have been prohibited by tion is made

that relator injunction as an improper expen- has not taken proper steps for the diture of public funds. In some of enforcement of its claim, assuming the schools of the state gymnasiums, that the city had the legal right to swimming pools, playgrounds, and contract.

The record is others forms of recreation, amuse

too fragmentary to enable ment, and diversion are provided, the court to decide the fundamental because it is recognized by advanced question as to the right of the city to public sentiment that such instru- take out the policy which has actualmentalities are calculated to, and do, ly been issued to it, and the duty of promote the cause of education, and the city to pay the premium theretend to better the schools and keep on. the pupils and teachers satisfied and "1. It does not appear that the contented. Many corporations em- bill of relator has been audited or ploying large numbers of laborers allowed by the common council, or throughout the country carry group that the comptroller has been orinsurance on such employees with dered to pay the same, or that such the same object in view as that audit, allowance, and order are unwhich evidently was in the minds of

necessary, or that the comptroller the members of the board or educa- has legal authority to pay the retion of the city of Albuquerque when lator. Peremptory mandamus will the insurance in question was pur- not lie unless it appears without chased. In many parts of the state contradiction that it is the clear we have consolidated schools, where legal duty of the comptroller to pay conveyances are hired, or means of the bill. transportation provided, by which “2. The record does not set forth pupils living at long distances from the facts needful to enable the court the school are transported to and to determine the question argued. from the consolidated school. The The insurance policy actually issued power of boards of education to do is not before us. We are left in so has never been questioned, be- ignorance as to its terms. It does cause it is recognized that better not appear whether or not the inschools are thus provided, and the surance continues to cover the life cause of education is promoted. of an employee after he voluntarily

“It is clear that the courts should leaves the service of the city. The not interfere with the discretion in opinion of Borst, J., at special term, trusted to boards of education under refers to disability benefits, but so the statute, unless it plainly appears far as the record shows the policy is that there has been a gross abuse of one of life insurance only. It does such discretion, and that the funds not appear that employees disabled are being spent for purposes and before the policy was issued are

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