83 S.W.2d 433 | Tex. App. | 1935
This suit was instituted on September 24, 1932, in the name of W. F. Harris and of the city of Corpus Christi upon the relation of W. F. Harris, as plaintiffs, against Edwin Flato and others, officers of the city of Corpus Christi, the Republic National Bank Trust Company of Dallas, First National Bank in Dallas, Guardian Trust Company of Houston, Smith Bros., Inc., the "unknown owners and holders" of certain bonds, and the city of Corpus Christi. The objects of the suit were: (1) To cancel, $2,725,000 of waterworks revenue bonds, as well as the deeds of trust securing payment thereof, which were issued by the city for the construction of additions and improvements to a waterworks system, to recover all money paid as interest on the bonds, and to restrain the payment of further sums upon the bonds; (2) to recover damages on behalf of the city for alleged breach of contract by Smith Bros., Inc., with reference to the construction of a dam and reservoir and the purchase of easements on lands. The district court sustained a general demurrer and numerous special exceptions of the defendants to the petition, and dismissed the cause. This appeal by Harris, individually and as relator, presents for review the trial court's action in sustaining the general demurrer to the petition.
The fourth amended original petition alleged, in substance, as follows: That Harris was a resident citizen and property taxpayer of the city of Corpus Christi and a patron of its waterworks system; that the city was incorporated under a charter which was granted by special act of the Legislature in 1909 (Loc. Sp. Laws, c. *435
33), and which has been amended from time to time by vote of the people pursuant to article
Article
Articles
"Article 1111. All cities and towns operating under this title have power to mortgage and encumber their light systems, water systems, or sewer systems, either, both, or all, and the franchise and income thereof, and everything pertaining thereto, acquired or to be acquired, to secure the payment of funds to purchase same, or to purchase additional water powers, riparian rights, or to build, improve, enlarge, extend or repair such systems, or either, or all of them, and as additional security therefor, by the terms of such encumbrance, may grant to the purchaser under sale or foreclosure thereunder, a franchise to operate the systems and properties so purchased for a term of not over twenty years after such purchase, subject to all laws regulating same then in force. No such obligation shall ever be a debt of such city or town, but solely a charge upon the properties so encumbered and shall never be reckoned in determining the power of such city or town to issue any bonds for any purpose authorized by law."
"Article 1112. No such light, water, or sewer system shall ever be sold until such sale is authorized by a majority vote of the qualified voters of such city or town; nor shall same be encumbered for more than five thousand dollars, except for purchase money, or for extensions, or to refund any existing indebtedness, until authorized in like manner. Such vote in either case shall be ascertained at an election, of which notice shall be given in like manner as in cases of the issuance of municipal bonds by such cities and towns."
The charter of the city of Corpus Christi contains the following provisions:
Article 2, § 2. "It shall have all powers of municipal government not prohibited to it by this charter, or by some general law of the State of Texas. * * * No ordinance shall be enacted inconsistent with the laws of the State of Texas."
Article 12, § 1. "Any citizen who is a property tax payer of the City of Corpus Christi may maintain an action in the proper court to restrain the execution of any illegal, unauthorized or fraudulent contract or agreement on behalf of the said city, and to restrain any disbursing officer of said city from paying any illegal, unauthorized or fraudulent bills, claims or demands against said city. * * *"
Article 12, § 14. "It shall be the duty of the city council, by ordinance to set apart and appropriate all the revenues and moneys derived from the operation of said works to the support, maintenance and extension thereof to other parts of the City, and no part of such revenue shall ever be appropriated to or used for any other purpose. * * *"
Article 12, § 15. "The City Council upon a vote of four-fifths thereof, shall have power, by ordinance, to contract for the extension of said water works to other parts of the City where needed, and, to this end, may pledge the net annual revenues thereof, and may give a lien on the said entire *437 plant, including such improvements or extensions, to secure the contract price of same, and may execute promissory notes therefor, signed by the Mayor and countersigned by the City Controller, and bearing interest at not exceeding six per cent per annum, and payable in equal annual installments; provided, such obligations shall never become a charge against the City or against the other revenues of the City, but said water works plant and said net annual revenues thereof shall stand pledged to secure the payment of said notes, and provided further that the cost of such improvements or extensions shall never exceed one-third of the actual value of said water works plant including such proposed improvements or extensions, and provided further that no extensions or improvements exceeding in cost the probable net revenues for any one year, shall ever be contracted for without first having been submitted to the vote of the qualified tax paying voters at an election held exclusively for that purpose."
It is a necessary prerequisite to the maintenance of an action for damages by a taxpayer on behalf of a municipal corporation against a third party for the taxpayer to allege the facts to show that he has made a demand upon the proper officers to bring such an action and that they have refused to do so or to show that such a demand by him would have been unavailing. It would result in endless confusion of municipal affairs if the individual citizen, who might be inspired by motives good or bad, could institute actions for damages for breach of municipal contracts without first presenting the question of the propriety of such procedure to the public officers, who are given discretion and charged with responsibility. The right of action, if any, is that of the city, not that of the citizen. He has involved no interest different from that of all of the other members of the general public. His initiative must be subordinated to that of the public by and through its duly selected officers. This petition is devoid of any allegation that Harris made demand upon the officers of the city to sue any of the defendants for damages on account of the matters mentioned in the petition, or that the officers refused to bring such an action after demand, or that such demand would have been fruitless. The demurrer was therefore correctly sustained in so far as the supposed cause of action for damages for breach of contract is concerned. 5 McQuillan, Municipal Corporations, §§ 5333, 5369; City of Corpus Christi v. Mireur (Tex.Civ.App.)
In City of San Antonio v. Strumberg, supra, the Supreme Court of Texas, speaking through Judge Gaines, said: "We think it a principle established by the overwhelming weight of authority in the courts of all countries subject to the common law, that no action lies to restrain an interference with a mere public right, at the suit of an individual who has not suffered or is not threatened with some damage peculiar to himself. As applied to public measures the doctrine is elementary. (2 Cooley's Blackstone, 219.) For a special damage resulting from the invasion of a right enjoyed by a party in common with the public, the law affords him a remedy by private action, but if the damages be only such as are common to all, the action must be brought by the lawfully constituted guardian or guardians of the public interest. The principle has been frequently applied in this court to another class of cases, and the right of an individual to sue without showing some special damage, either suffered or threatened has been uniformly denied."
The same rule applies to the petition in so far as it may be construed as asserting a cause of action to recover from some or all of the defendants moneys previously paid by the city by way of interest or otherwise upon the bonds. Fuller v. Trustees of Deerfield Academy, supra; Wood v. Bangs, supra.
Nor does article 12, § 1, of the city charter, above quoted, change the general rule as to the purported causes of action for damages for breach of contract or for recovery of money paid. The language relates only to interference by the citizen with the making of illegal or unauthorized contracts by the officers of the city. It does not authorize the citizen to sue for the city. The distinction between a suit against the officers and one for the city is *438 clear upon the face of the charter provision. Thus, in City of Corpus Christi v. Mireur, supra, this court, through Chief Justice Fly, said: "Appellants seek to construe section 1, art. 12, of the charter, which provides that `any citizen who is a property taxpayer of the city of Corpus Christi may maintain an action in the proper court to restrain the execution of any illegal, unauthorized or fraudulent contract or agreement on behalf of said city,' as meaning that the taxpayer may act for the city in prosecuting a suit to restrain the execution of an illegal contract. Such construction is unwarranted. There would be no reason for placing any such power in the hands of the taxpayer, and the other matters which the taxpayer is given the right to have restrained clearly show that the suit is not in behalf of the city, but to prevent the city council, in behalf of the city, from making `any illegal, unauthorized, or fraudulent contract or agreement.' Immediately in connection with the authority given to restrain the city from making illegal contracts is given the right to restrain any disbursing officer from paying illegal bills, etc., clearly indicating that the whole object of the section is to give authority to prevent illegal action on the part of the city or its officers, and not to assist them in avoiding some contract, into which they may have been inveigled."
A petition which seeks the equitable relief of cancellation, rescission, removal of cloud from title, and injunction, and which shows upon its face that the complainant has been guilty of laches, fails to state a cause of action, and is therefore subject to general demurrer. This petition deals with the construction of the water supply plant for the city, and shows the issuance of bonds therefor in amounts upon dates, respectively, as follows: $2,000,000 on July 21, 1927, $350,000 on August 1, 1928, and $375,000 on September 1, 1929. It, also, shows that there was a refunding issue on March 1, 1933, covering the two last issues. Presumably, the required newspaper notices were given and other precedent steps taken. These transactions were public acts of the city commission. Lands or easements were conveyed to the city. The bonds passed into the hands of the various persons referred to in the petition as "unknown owners and holders." The interest was paid on the bonds from time to time; and the sinking fund installments were periodically set aside. The citizen is charged by law with knowledge of these things. The allegation seeking to excuse delay, that Harris had no occasion to learn the facts and could not have known them and did not know them until after the bonds had been delivered and the dam had washed away, is of no consequence. He must have known the facts; in legal contemplation he did know them. And yet it was not until September 24, 1932, that he filed the original petition in this case. The showing of such unreasonable delay, during which time the rights of others have intervened, constitutes laches and presents a fatal defect in the petition. Penn Mutual Life Insurance Co. v. City of Austin,
The issuance of waterworks revenue bonds by a city of over 5,000 population for the construction of a reservoir and other additions to the waterworks system of the city is not required to be submitted to, and approved by, a majority of the taxpaying citizens of the city, although the charter of the city may so provide. The city of Corpus Christi, having sufficient population, is subject to the so-called "home rule amendment" (article
In City of Dayton v. Allred,
In Womack v. City of West University Place, supra, it was said: "The ordinance authorizing the issuance of the bonds is set out in appellant's petition. It recites that the bonds are to provide for refunding the existing indebtedness of the waterworks system and the extension of municipal water and sewer plants and systems. It will be observed that article 1112, supra, authorizes the issuance of bonds in excess of $5,000 without a vote where the proceeds of the bonds are to be used to pay for the `purchase money, or for extensions, or to refund any existing indebtedness.' In this case the bonds were to be used to refund existing indebtedness of the waterworks system and to extend the waterworks and sewer systems. So it appears that the ordinance was strictly in accord with the law, and no submission of the question to a vote was necessary."
In Huff v. City of Wichita Falls, supra, the Supreme Court said: "The courts have settled the question that charter provisions and city ordinances of home-rule cities are not valid when in conflict with the general laws of the state" — citing cases.
All of the appellant's assignments of error and the propositions thereunder are overruled.
The judgment of the district court is affirmed.