Sharp v. Hall

• Decision Date: 17 June 1947
• Docket Number: 32983.
• Parties: SHARP v. HALL, City Manager.
• Court: Oklahoma Supreme Court

181 P.2d 972

198 Okla. 678, 1947 OK 193

SHARP v. HALL, City Manager.

No. 32983.

Supreme Court of Oklahoma

June 17, 1947

Appeal from District Court, Muskogee County; O. H. P. Brewer, Judge.

Action by Mont T. Sharp against John Oliver Hall, City Manager of the City of Muskogee, Oklahoma, to enjoin collection of sewer fees. From a judgment for defendant, the plaintiff appeals.

Affirmed.

Syllabus by the Court.

1. Neither the Constitution nor statutes specifically prescribe what rates may be charged for a municipally owned utility nor to what purpose the profits derived therefrom must be appropriated.

2. Sewers are 'public utilities' within the meaning of the term as used in Section 27, Art. 10 of the Constitution.

3. Municipality may fix, as a basis for computing charge for use of sewer, the volume of water delivered to the user through the water meter.

4. An ordinance imposing service fee for use of public sewer and basing the amount thereof on amount of water used, and making the person purchasing the water liable therefor does not deprive such user of property without due process of law.

Malcolm E. Rosser, of Muskogee, for plaintiff in error.

Julian B. Fite, City Atty., of Muskogee, for defendant in error.

DAVISON Vice Chief Justice.

In November, 1946, the City of Muskogee passed an ordinance establishing fees for the use of public sewers by its inhabitants, and providing that the net profits should be placed in the general fund. For the purpose of fixing the rates, two classifications were made: dwellings were put on a flat per month rate; commercial users were charged on a sliding scale determined by the amount of water used. The sewer charge was added to each water bill and a failure to pay the total of water fee and sewer fee was made a cause for discontinuance of water service. The charge was made against the property owner or tenant according to the fact as to who was liable for the water bill.

About two weeks after the passage of the ordinance, a resolution was passed, by the terms of which, multiple unit housing structures were classified as commercial users. Plaintiff the owner of several multiple unit buildings, and chargeable with the sewer fees under the terms of the ordinance and resolution, because of his assumption of liability for public utility charges, brought this action against the defendant as city manager, to enjoin the collection of such charges. Judgment of the trial court was for defendant and plaintiff appeals.

For reversal of the judgment, plaintiff relies upon two propositions: first, that the city cannot make a charge for the use of its sewers; and second, that the ordinance deprives plaintiff of his property without due process of law, in violation of the provisions of the Constitution.

The Constitution of this state grants to municipalities the privilege of engaging in business (Art. 18, § 6): 'Every municipal corporation within this State shall have the right to engage in any business or enterprise which may be engaged in by a person, firm, or corporation by virtue of a franchise from said corporation.'

This same subject is also embraced in the statutes. 11 O.S.1941 § 563.

The authority to, and method of, raising funds for the purchase of public utilities are contained in Art. 10, § 27: 'Any incorporated city or town in this State may, by a majority of the qualified property tax paying voters of such city or town, voting at an election to be held for that purpose, be allowed to become indebted in a larger amount than that specified in section twenty-six, for the purpose of purchasing or constructing public utilities, or for repairing the same, to be owned exclusively by such city: Provided That any such city or town incurring any such indebtedness requiring the assent of the voters as aforesaid, shall have the power to provide for, and, before or at the time of incurring such indebtedness, shall provide for the collection of an annual tax in addition to the other taxes provided for by this Constitution, sufficient to pay the interest on such indebtedness as it falls due, and also to constitute a sinking fund for the payment of the principal thereof within twenty-five years from the time of contracting same.' In the operation of a public utility, the municipality engages in business as a private corporation, but retains its cloak of governmental authority and is bound by the limitations provided by the constitution. As we said in Public Service Co. v. City of Wagoner, 181 Okl. 281, 73 P.2d 464, 467: 'Regardless of the fact that a municipally owned light of water plant functions partly governmental and partly proprietary, municipal warrants drawn against the current general fund of the city to pay for expenses in either capacity becomes an obligation of the city. * * *'

But when the public utility is self-sustaining, the municipality acts in a proprietary capacity in managing and operating the business and, as said in St. Louis-San Francisco R. Co. v. Andrews, 137 Okl. 222, 278 P. 617, 621: '* * * Neither the Constitution nor statutes specifically prescribe what rates may be charged for a municipally owned utility, nor to what purpose the profits derived therefrom must be appropriated. * * *'

We have, on several occasions, reaffirmed this doctrine, two of the cases being Perrine v. Bonaparte, 140 Okl. 165, 282 P. 332, and Jones v. Blaine, 149 Okl. 153, 300 P. 369.

Municipalities are granted, by the above constitutional provisions, the power 'to engage in any business or enterprise which may be engaged in by a person, firm, or corporation by virtue of a franchise * * *' and in order to do so, may become indebted beyond the constitutional limit 'for the purpose of purchasing or constructing public utilities, or for repairing the same, to be owned exclusively by such city.'

If therefore, sanitary sewers of a city comprise a public utility, the municipality may manage and operate them, in its proprietary capacity as a 'business enterprise' and the fact that the profits therefrom are put into the general revenue fund of the city does not have the effect of making such operation...