Adkisson v. Ozment

• Decision Date: 28 November 1977
• Docket Number: No. 77-187,77-187
• Citation: 370 N.E.2d 594,12 Ill.Dec. 790,55 Ill.App.3d 108
• Parties: , 12 Ill.Dec. 790 Ralph ADKISSON, Jim Rittenberry, William Borders, James Conrad, Richard Swansey, as Board of Trustees of the Dorris Heights Water Board Association of Saline County, Illinois, Plaintiffs-Appellees, v. Kenneth L. OZMENT, Mayor, Butch Biggs, Jerome Bishop, Charles Dee Barrett, Gene Ragan, as City Commissioners of the City of Harrisburg, Illinois, and the City of Harrisburg, Illinois, a Municipal Corporation, Defendants-Appellants.
• Court: United States Appellate Court of Illinois

Page 594

370 N.E.2d 594

55 Ill.App.3d 108, 12 Ill.Dec. 790

Ralph ADKISSON, Jim Rittenberry, William Borders, James Conrad, Richard Swansey, as Board of Trustees of the Dorris Heights Water Board Association of Saline County Illinois, Plaintiffs-Appellees, v. Kenneth L. OZMENT, Mayor, Butch Biggs, Jerome Bishop Charles Dee Barrett, Gene Ragan, as City Commissioners of the City of Harrisburg, Illinois, and the City of Harrisburg, Illinois, a Municipal Corporation, Defendants-Appellants.

No. 77-187.

Appellate Court of Illinois, Fifth District.

Nov. 28, 1977.

Charles M. Ferguson, Harrisburg, Conger & Elliott, Carmi, for defendants-appellants.

Harris & Lambert, Marion, for plaintiffs-appellees.

GEORGE J. MORAN, Justice:

Defendants, Kenneth Ozment, Mayor, the City of Harrisburg, Illinois, a municipal corporation, and Butch Biggs, Jerome Bishop, Charles Dee Barrett, Gene Ragan, as city commissioners of the City of Harrisburg, hereinafter referred to as "the City," appeal from a decree of the circuit court of Saline County permanently enjoining them from increasing certain water rates pursuant to a contract dated August 6, 1957.

Plaintiffs Adkisson, Rittenberry, Borders, Conrad and Swansey as Board of Trustees of the Dorris Heights Water Board Association of Saline County, Illinois, hereinafter referred to as "the Board," brought this action following an attempted termination on June 18, 1975 of the said contract. Defendants counterclaimed, inter alia, for a declaration that the August 6, 1957 contract did not constitute a valid, binding agreement or in the alternative that the contract had been lawfully terminated and that a new contract at a new rate had been created.

On August 11, 1975, the circuit court of Saline County issued a temporary injunction which was subsequently dissolved on September 17, 1975. The final decree, entered January 27, 1977, denied defendants' counterclaim, declared the August 6, 1957 agreement to be a valid contract and permanently enjoined the defendant "from failing to comply with the terms and provisions of said agreement" and "from in any way increasing the water rates of the residents of Dorris Heights, Saline County, Illinois, except pursuant to the provisions set forth in said agreement."

Because the agreement in question is relatively brief and because we are compelled to construe the contract as a whole, we quote it in its entirety "THIS AGREEMENT made and entered into this 6th day of August, 1957, by and between the City of Harrisburg, a municipal corporation, party of the first part; and Jim Rittenberry, Lewis Dalton, Ralph Adkisson, William Borders and Elmer Holland, members of the Dorris Heights Water Board Association, parties of the second part, as follows:

Party of the first part agrees to furnish water and available pipe to extend the water service to the Dorris Heights community commencing at the connection at the housing project in Wilmoth Addition and run North to Dorris Heights Main Road to the distance equivalent to the available pipe owned by the city of Harrisburg for the use and benefit of the parties of the second part and for other prospective water users complying with the terms of this agreement.

Parties of the second part promise and agree to install, maintain and secure the right-of-way for the installation of said pipe to the users thereof and to cause to be installed a separate water meter for each user of water and to install the said meters.

It is understood and agreed that the said water line shall be under the supervision, maintenance, control and rules of the Dorris Heights Water Board until such time, if and when, the said territory should be incorporated into the city limits of the city of Harrisburg.

It is understood and agreed that water shall be billed by the party of the first part to the users in accordance with the current rates existing in the city of Harrisburg, and that the users shall be subject to all of the Ordinances of the city of Harrisburg and the rules and regulations of the Water Department of said City."

Defendants first contend that the agreement is unenforceable due to an absence of mutuality of obligation. In support of its argument defendants note that the terms of the contract demand nothing of the Board or the residents of Dorris Heights neither that they use nor pay for the water it is obligated to furnish. While it is true that the contract does not explicitly require use or payment by plaintiffs, such promises are clearly implied from a reading of the contract as a whole. (Illinois Comm. Com. v. Central Illinois Public Ser. Co., 25 Ill.App.3d 79, 322 N.E.2d 520; Cook-Master, Inc. v. Nicro Steel Products, Inc., 339 Ill.App. 519, 90 N.E.2d 657.) In Thebest Laundry & Cleaning Co. v. Duffy, Jr., 293 Ill.App. 252, 12 N.E.2d 235, the court quoted from a New York opinion (Grossman v. Schenker, 206 N.Y. 466 at 469, 100 N.E. 39 at 40), where it was stated:

"A contract includes not only what the parties said but also what is necessarily to be implied from what they said."

We feel that the language of the contract in this case necessarily implied a promise to use the water furnished and to pay for the service as billed.

Nevertheless, we recognize that even contracts which are defective due to a lack of mutuality at inception may be cured by performance in conformance therewith (Air Conditioning Training Corp. v. Majer, 324 Ill.App. 387, 58 N.E.2d 294.) In this case the plaintiffs performed the implied promises of the contract using and paying for the water supply for approximately 18 years. Thus, we refuse to accept defendants' contention that the contract was void for lack of mutuality of obligation.

The City alleges alternatively that regardless of mutuality the contract was for an indefinite duration and therefore terminable by either side upon reasonable notice. It contends that reasonable notice was provided by its June 18, 1975 letter sent to plaintiffs. The letter provided in pertinent part:

"To the extent that the Agreement previously entered into with the Buena Vista Water Board Association, the Dorris Heights Water Board Association and the Wilmoth Addition Water Board may constitute contracts for water supply, they are hereby terminated.

All water customers outside the City limits shall be charged at double the inside water rates, with the exception of the Water Districts.

The City will be glad to give Dorris Heights, Buena Vista and Wilmoth Addition Water Boards the opportunity of combining your three Water Boards into one water district and placing a master meter at the City limits and your District billing their own customers, or pay double the rate of the inside water rates and we will bill your customers as in the past.

If we have not heard from you within thirty (30) days of the date of this letter we will assume you wish to pay the double rate."

Plaintiffs, on the other hand, assert the alleged termination was merely a guise for breaching the contract. They argue that by continuing to provide water at a different rate than that applicable within the city of Harrisburg, the City has breached the price term specified in the contract. The Board further contends that the contract is either perpetual or terminable only upon the designated event. In support of this argument the Board refers to the language of paragraph 4 of the agreement which provides that upon the annexation of Dorris Heights to the City of Harrisburg, the Board shall be relieved of its duty to supervise, maintain and control the water line. The Board urges that this condition extends to the duration of the entire contract itself. We disagree. When the agreement is taken as a whole, it is clear that this provision relates merely to the maintenance, supervision and control of the water line. In order to bind the parties to such a restrictive condition as to duration, we feel more precise language would be necessary. In construing the meaning of words in a contract a court attaches paramount importance to the intention of the parties. Had the parties intended annexation as the terminating event to the duration of the contract, such could easily have been expressed.

Moreover, we feel that the Board has mistakenly attached undue significance to the use of the term "water line" in this paragraph of the agreement. It argues that since "pipe" was the term used in the previous paragraphs the new term includes the water which runs through the pipe; hence, the paragraph refers not so...