Antlers Hotel, Inc. v. Town of City of Newcastle

• Decision Date: 14 July 1959
• Docket Number: 2866,Nos. 2865,s. 2865
• Citation: 341 P.2d 951,80 Wyo. 294
• Parties: ANTLERS HOTEL, INC., a corporation, Appellant (Defendant below), v. TOWN OF CITY OF NEWCASTLE, a municipal corporation, Appellee (Plaintiff below). Ira BALDWIN, Appellant (Defendant below), v. TOWN OF CITY OF NEWCASTLE, a municipal corporation, Appellee (Plaintiff below).
• Court: Wyoming Supreme Court

Page 951

341 P.2d 951

80 Wyo. 294

ANTLERS HOTEL, INC., a corporation, Appellant (Defendant below), v. TOWN OF CITY OF NEWCASTLE, a municipal corporation, Appellee (Plaintiff below).

Ira BALDWIN, Appellant (Defendant below), v. TOWN OF CITY OF NEWCASTLE, a municipal corporation, Appellee (Plaintiff below).

Nos. 2865, 2866.

Supreme Court of Wyoming.

July 14, 1959.

Ellery, Gray & Hickey, Cheyenne, for appellant.

Thomas L. Whitley, City Atty., Newcastle, for appellee.

Before BLUME, C. J., and PARKER and HARNSBERGER, JJ.

Mr. Chief Justice BLUME delivered the opinion of the court.

The Town of the City of Newcastle, a municipal corporation, brought an action against the Antlers Hotel, Inc., defendant below and appellant here, and also an action against one Ira Baldwin who conducted a laundry in the Town of Newcastle and was defendant below and is appellant here. The two actions were consolidated in the court below and have been consolidated on this appeal, involving as they do similar facts and identical rules of law and claims in connection therewith. The town asked judgment against the Antlers Hotel for the sum of $493.14 due for the use of the sewer system of the town from September 28, 1955, to November 29, 1957, and also asked judgment against Ira Baldwin for $269.96 for the period between 1953 and 1957, alleging that the amounts due have been unpaid. The town further asked judgment for penalty and attorneys' fees. After answer was filed and the pre-trial conference held and answers to interrogatories submitted, the court entered judgment in favor of the town against the respective defendants and appellants here for the amounts claimed in the complaints, except that it refused to give judgment for any penalty or counsel fees. From that judgment the defendants below and appellants here have appealed to this court.

If we understand the contentions of the appellants herein, they are as follows: First, the service charges for sewer made against them are excessive and in violation of § 29-2706, W.C.S.1945; Second, the rates, that is to say, service charges, established by the town are arbitrary, capricious, discriminatory and not uniform. We shall consider these contentions in the order above mentioned.

1. Before stating what appears to be the contention of appellants in greater detail, we should perhaps first refer to the fact that it is stipulated that the sewer or, rather, part of the sewer used by the Antlers Hotel was constructed in 1920 and that part of the sewer used by Baldwin was constructed in 1932. The parts of the sewer so constructed were paid for by bonds constituting a general obligation of the town and they have been fully paid. Subsequently, in 1949, revenue bonds were issued by the town in the sums of $64,000 and $200,000. In 1954 further revenue bonds were issued in the sum of $120,000. These last bonds were issued for a sewer disposal plant as shown by the following agreement between the parties:

'It is agreed that the plaintiff town constructed a sewer disposal unit in the form of a sewer lagoon and constructed a main sewer line from the city limits of the town to the sewer lagoon which is located outside of the town and that this construction took place during the year 1954. That all of the sewage of the town, including the sewage of both defendants, passes through the main line and into the sewer lagoon which was constructed in the year 1954. That the construction in 1954, above referred to, was financed by a water and sewer revenue bond issue, which was issued by the town council in that year in the amount of $120,000 pursuant to statute.'

It appears to be the contention of appellants that in view of the fact that their sewer was originally constructed for them in 1920 and 1932 and the construction cost was paid for by general obligation bonds which have been paid, they are not responsible in any was for charges arising by reason of any revenue bonds issued subsequently, and that as the service charges against the appellants contain a sum levied by reason of the revenue bonds, these charges are excessive and illegal. In other words, counsel seem to think that the only just service charge which may be made against appellants is that arising out of the operation and maintenance plus the depreciation charge for that part of the town's sewer system which existed at the time the sewer system was established in 1920 and 1932 respectively. They claim that they are not benefited by anything else and that the town cannot consider the system as a whole insofar as appellants are concerned and levy a service charge or rate accordingly on all the users of the system. We think counsel are mistaken. It would be impractical for a city or town to fix one rate based on the construction of part of the sewer system at one time and fix another rate for another part of the sewer constructed at another time all still another rate for the part of the sewer constructed subsequently. It is very clear that the sewage disposal plant was of benefit to appellants as well as to every other user of the sewer system. As already shown, the sewage of both appellants passes through the main line and into the sewer lagoon which was constructed in 1954. Hence, it was of benefit to the appellants to the same extent as to any other users of the sewer system. The record does not show for what purpose the bonds of 1949 above mentioned were issued. Assuming that they were issued for the purpose of extending the sewer system to other parts of the town, it by no means follows that the appellants were not benefited, for every owner of property in a city or town is interested for sanitary purposes that a sewer system should be established throughout the community, and a distinct benefit accrues to every property owner if that is done.

A case very closely in point herein is the case of Morse v. Wise, 37 Wash.2d 806, 226 P.2d 214. The difference in that case is that the appellants had paid for their sewer by special assessments, while in the case at bar it is claimed that their sewer was paid for by general obligation bonds as already mentioned. The appellants in the Washington case claimed that they should not be compelled to pay any service charges by reason of the extension of the system because they were in no way benefited thereby, just as is claimed in the case at bar. In that case the city was authorized to create a special fund or funds for the sole purpose of defraying the cost of the public utility or additions, betterments or extensions, just as is true here. The court stated, among other things, that when the city provided for the issuance of revenue bonds and made service charges to pay the cost and operation thereof it acted pursuant to the police power so as to protect the health of its inhabitants. It continued as follows at 226 P.2d 217, 218:

'* * * The act does not exclude sewer systems constructed pursuant to local improvement statutes, but it contemplates the raising of revenue by fixing rates and charges for the furnishing of service to all of those served by the system of sewerage as a whole. * * *

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'It was not necessary that the city council give consideration to the fact that appellants have been assessed for the cost of construction of the part of the sewer system serving them and their properties when fixing sewer service charges. The property owners did not 'acquire' the mains and laterals when they paid the cost of construction. * * *

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'* * * The legislature has supplied cities and towns with an additional method of raising revenue to defray the expense connected with sewage disposal facilities and to fix rates and charges for the use thereof. The sewer system serving appellants and those similarly situated was constructed by the city of Chelan, and although the greater part of the cost was paid by the property owners served, the city had control over it and had the duty to maintain it. The act gave the city the authority to integrate it into the later constructed sewer system and make a service charge to all whose property is served by the entire sewer system. * * *'

We agree with the reasoning in this case.

As already stated, counsel for appellants refer to § 29-2706, W.C.S.1945, and think that the second portion thereof, in conjunction with the last sentence which is italicized by them and in this opinion, lends support to their contention. We do not think so. The section reads as follows:

'Any municipality borrowing money and improving or constructing or acquiring and improving a sewerage system under the provisions of this Act [§§ 29-2701-29-2711], is authorized and directed to charge and collect from the users of such system at a rate which shall be sufficient at all times to pay the cost of operating and maintaining such system, provide an adequate depreciation fund and pay the principal and interest on the bonds issued by the municipality under the provisions of this Act.

'Any municipality that owns and operates or that may hereafter own and operate a sewerage system constructed or acquired under the provisions of any law of this state may, by ordinance, provide that the users of such system shall pay a service rate sufficient to defray the cost of operating and maintaining such system, and of providing an adequate depreciation fund thereof and thereafter such municipality is authorized to charge and collect such service rate for such purpose but no tax or other charge shall thereafter be assessed against the users of such...