City of Crosbyton v. Texas-New Mexico Utilities Co.
| Decision Date | 24 November 1941 |
| Docket Number | No. 5357.,5357. |
| Citation | 157 S.W.2d 418 |
| Parties | CITY OF CROSBYTON v. TEXAS-NEW MEXICO UTILITIES CO. |
| Court | Texas Court of Appeals |
Appeal from District Court, Crosby County; Daniel A. Blair, Judge.
Action by the Texas-New Mexico Utilities Company against the City of Crosbyton, for breach of a contract to purchase electric energy from plaintiff for operation of defendant's waterworks pumps and lighting of its streets. Judgment for plaintiff, and defendant appeals.
Affirmed.
W. P. Walker, of Crosbyton, for appellant.
Crenshaw, Dupree & Milam, of Lubbock, for appellee.
On the 14th of September, 1925, appellant, the City of Crosbyton, which was organized and operating as a municipal corporation under the general laws of the State, by proper action of its governing body, entered into a contract with Texas Utilities Company, a corporation, the name of which was afterwards changed to Texas-New Mexico Utilities Company, the appellee herein, by which appellee agreed to furnish, and appellant city agreed to take and purchase for a term of 20 years from its date, electric energy necessary to meet its entire requirements for power to operate the pumps in connection with the city water works, a system owned by the city. The contract also required it to take and purchase electric current to meet its entire requirements during such term for the purpose of lighting the streets. The rates to be paid by the city were provided in the contract but were afterwards reduced by agreement. The contract was performed by both parties until December 20, 1939, when appellant refused further to comply with it and notified appellee to that effect.
The record does not contain the original petition but on April 11, 1940, appellee filed its first amended original petition in which it sought damages from appellant for breaching the contract, alleging that certain equipment installed by it for the purpose of carrying out the contract had become worthless and that during the balance of the term of twenty years provided by the contract it would have made a profit from furnishing the electric energy as provided in the contract, both of which items of damage it alleged amounted to $3,962.
The case was tried on January 22, 1941, and submitted to a jury upon two special issues, in answer to which the jury found that appellee would have made a profit during the unexpired portion of the contract term of $372.60 from furnishing the electric energy necessary for lighting the streets and $467.36 from furnishing electric current to do the city's pumping.
Judgment for appellee was rendered by the court for the aggregate amount found by the jury and, its motion for a new trial being overruled, appellant brings the case before this court for review.
Appellant presents a number of assignments of error and propositions of law but we think the case is controlled by two contentions made by it which are, first, that the contract involved the exercise by the city of its governmental functions and the effect of its provisions was to delegate or cede those functions and thus embarrass subsequent administrations. Secondly, that, if the contract involved the exercise of the city's proprietary or corporate functions, then its exclusive features render it obnoxious to the constitution and laws of the state which forbid monopolies and conspiracies against trade.
The contract is lengthy but its pertinent features are to the effect that the appellee would furnish and the city was required to take electric energy necessary to meet its entire requirements for power to do the city pumping and electric current to light the streets during the life of the contract. It recited that the provisions in relation to increasing and reducing the connected load were merely for the purpose of enabling the city to take care of its demands from time to time during the life of the contract and were not to be construed as authorizing the city to increase or decrease its requirements for electric current by using the same from any other source. In regard to the pumping of the water the contract provided that the city engaged appellee to furnish to it the power necessary to do all of its pumping for the city water supply which included the supply of water to the residents of the city through the water system owned by the city, as well as water used for fire protection, sewerage, and other public purposes, during the term of 20 years provided by the contract. There is no question that, in so far as the electric energy necessary to operate the city's pumps for its water supply and the street lighting system are concerned, the contract was exclusive.
Appellant's first contention is that the duty of the mayor and city commissioners to maintain control over the governmental and legislative functions of the city is enjoined by the constitution and laws of the state and such functions cannot be delegated to others. It asserts that, by entering into the contract of September 14, 1925, the governing body of the city bound itself to purchase all of the electric current that would be needed or required by it to operate its pumps in connection with the city's water works and street lights, the effect of which, it says, was to preclude the city and its future administrations from contracting for or acquiring such power or energy from any other person or source. In support of its contention it cites us to the familiar case of City of Brenham v. Brenham Water Co., 67 Tex. 542, 4 S.W. 143, and many other cases of like import.
The law is well established in this state, as well as other jurisdictions in this country, that the functions of a city are dual in their nature. One element of such functions is designated as governmental or legislative and the other as proprietary, business or corporate functions. It is hardly necessary to cite authority in support of the proposition that when a city is exercising those functions that are enjoined upon it by law, that is, those which it is bound to assume under the provisions of the statutes of the state or government which gives it life, it is considered to be an arm of the government and is acting for the people generally as an agency of the government. These powers and functions are, therefore, governmental in their nature and can neither be ceded nor exercised in such manner as to bind the future course of the city or prevent modification...
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