City of Mesquite v. Scyene Inv. Co.

• Decision Date: 15 June 1956
• Docket Number: No. 15082,15082
• Parties: CITY OF MESQUITE, Appellant, v. SCYENE INVESTMENT CO., Appellee.
• Court: Texas Court of Appeals

Page 276

295 S.W.2d 276

CITY OF MESQUITE, Appellant, v. SCYENE INVESTMENT CO., Appellee.

No. 15082.

Court of Civil Appeals of Texas, Dallas.

June 15, 1956.

Rehearing Denied Nov. 2, 1956.

Virgil R. Sanders, Bowyer, Gray, Thomas, Crozier & Harris, and William W. Sweet, Jr., Dallas, and Balford Morrison, Irving, for appellant.

Prentice Wilson, Dallas, for appellee.

YOUNG, Justice.

The appeal followed Summary Judgment proceedings, Rule 166-A, Texas, Rules of Civil Procedure, wherein appellee obtained judgment against the City of Mesquite for $79,339.19 with interest at 6% from date of rendition, representing an amount of indebtedness allegedly due to the Investment Company from appellant municipality.

We gather from the pleading and briefs of the parties that appellee is the developer of an extensive Addition to the City of Mesquite known as Rollingwood Hills Addition and lying wholly within city limits; that about March 30, 1954 defendant City through its governing body accepted a bid from Pelphrey & Basham, contractors, for construction of a sanitary sewer line from the collector line along Mesquite Creek near West Davis Street, and for the construction of a water line from main near the water tower, both to the alley serving the Addition; also water and sewer lines to service lots abutting Derby Lane and Danbury Drive; the approved bid, inclusive of engineering costs, to be $92,800.79, of which the sum of $80,656.74 was allocated to defendant City and $12,144.05 to plaintiff Company. It then advanced to defendant the total cost of construction of the sewer and water lines; with transaction embodied in municipal resolution of date April 6, 1954, which provided in part: 'That the Scyene Investment Company shall be reimbursed for the cost of the sanitary sewer line from the collector line along Mesquite Creek near West Davis Street and for the water line from the main near the water tower both to the alley serving Block A. Rollingwood Hills Addition, by the City of Mesquite, Texas, from the sole of bonds when the revenues allow such sale.' (Emphasis ours.) (An unused balance of the sum total so advanced was later refunded to the developer, leaving $79,339.19 as ablance of indebtedness, and judgment was finally rendered in such amount.)

The suit of appellee was on an express contract interpreting above wording of the resolution to mean that '* * * said plaintiff would be reimbursed for said advancement for said purpose in said sum of $80,656.74 out of and by use of the first proceeds to be received by the defendant City from the sale of previously voted and unsold water and sewerage revenue bonds * * *'; in other words, that 'use of the word 'From the sale of bonds when the revenues allow such sale,' as set forth in said resolution, had reference to and by all parties meant and was intended to refer to the unissued and unsold $315,000.00 of revenue bonds recently issued and sold by the defendant City * * *.' Alternatively, this appellee pled an implied contract, seeking recovery in the same amount ($80,656.74) as the reasonable value of benefits received and accepted by defendant City from the moneys advanced to it by plaintiff, as well as the reasonable value of the sewer and water lines accepted by defendant and which were paid for by plaintiff's furnished money.

Appellant City in lengthy allegations (first of exceptions and denial) pled prematurity of suit; and that plaintiff's proposal in the beginning was to advance the funds necessary for installation of said water and sewer lines, a refund of the cost thereof to await such time as the revenues from property in the Addition would justify the sale of revenue bonds; the anticipated money from sale of bonds already authorized being earmarked for other purposes; also charging illegality on various grounds of the express contract or resolution sued upon. The Investment Company by supplemental petition and exceptions asserts that the City's interpretation of the April 1954 resolution would result in an illegal and unenforceable contract, in that 'the City has no power to vote, issue or sell revenue bonds, the payment or retirement of which would be restricted solely to the revenues received or collected by the City on account of sewer and water line connections to some particular subdivision with said City, but can only vote, issue and sell general sewer and water revenue bonds to be paid and retired from sewer and water revenue collections from each and every citizen within the city limits'; thereby necessitating its alternative suit on implied contract-an action barred by the two-year statute of limitation beginning with date of advancement of the money to defendant City (April 6, 1954). The work of installing these water and sewer lines has long since been completed by the contractors; and the City does not deny its acceptance of same and entire domination and control thereof since completion; or, for that matter, its adoption of the resolution, appellee's furnishing of the money for the particular purpose, and use of the advancement for construction of the lines.

Terms of the resolution that appellee was to be reimbursed in the sum of $80,656.74 'from the sale of bonds when the revenues allow such sale,' are obviously ambiguous, requiring evidence to determine its meaning; and summary judgment is precluded on basis of the express contract, as appellant initially points out. Appellee admits that the judgment rendered was upon its alternative cause of action; in such connection asserting that appellant City has not, by affidavits or other showing, required under Rule 166-A, raised genuine issues of any material fact; thereby authorizing the entry of summary judgment on basis of an implied contract as a matter of law.

To appellee's motions for summary judgment (original and supplemental) were attached the affidavits of Vernon R. Bostick, its Vice President, and Homer A. Hunter, City Engineer of defendant City; which exhibits are too lengthy for inclusion in full. Each affiant reiterated the terms of said April 6 resolution; Bostick stating that for the money advancement of $92,800.79, his Company was to be reimbursed to extent of $80,656.74 from sale of $315,000 worth of revenue bonds remaining of an already authorized bond issue; that said water and sewer lines had been completed and accepted by the City, with the latter exercising full control and domination over the lines, now utilizing same for revenue purposes. And further: 'That the reasonable value of said water the sewer lines upon completion and at the time of acceptance of same by the City of Mesquite in the summer of 1954 was in excess of $91,483.24; that the actual cost of the construction of said sewer and water lines, including the cost of right of way and engineer's supervisions fees, aggregated the sum of $91,483.24; that the value of the money and property furnished by the Scyene Investment Co. to the City of Mesquite and the benefits which the City of Mesquite has received and accepted is in excess of $91,483.24; that the Scyene Investment Co. entered into the transaction in good faith and upon reliance on the promises and agreements made to it by the governing body of the City of Mesquite, who knowingly received and accepted Scyene Investment Co.'s money and used the same for the purposes aforesaid.' The affidavit of Homer A. Hunter likewise stated: '* * * that the cost of the construction of said sewer and water lines, including right of ways acquired in connection therewith was approximately $91,483.24, and that the reasonable value of said sewer and water...