City of Morgantown v. Town of Star City, 13072

• Decision Date: 20 March 1973
• Docket Number: No. 13072,13072
• Court: West Virginia Supreme Court
• Parties: The CITY OF MORGANTOWN, etc. v. The TOWN OF STAR CITY, etc., et al.

Page 166

195 S.E.2d 166

156 W.Va. 529

The CITY OF MORGANTOWN, etc. v. The TOWN OF STAR CITY, etc., et al.

No. 13072.

Supreme Court of Appeals of West Virginia.

Submitted Feb. 6, 1973.

Decided March 20, 1973.

Syllabus by the Court

Under the provisions of Code, 16--13--19, as amended, a municipal corporation which has ordered the construction of a sewage disposal plant (called owner) is authorized to contract with another municipal corporation (called lessee) and such lessee is authorized to enter into such contract with the owner for the use of such plant or works and for the construction of intercepting sewers and appurtenant works, upon such terms and conditions as may be set forth in said contract.

S. J. Angotti, Mike Magro, Jr., Morgantown, for appellants.

Frank J. DePond, William A. Moreland, Morgantown, for appellee.

BERRY, President:

The appellant, the Town of Star City, appeals from a final judgment of the Circuit Court of Monongalia County in a declaratory judgment proceeding entered on May 25, 1970 which ordered that the Town of Star City was legally obligated to pay to the City of Morgantown $40,262 for its share of the construction costs of a sewage treatment plant and an interceptor sewer system in accordance with the terms of two contracts which the municipalities entered into in 1965. The appellant's primary contention is that there was no statutory or legal authority for the Town of Star City to enter into the contracts and thus the contracts are ultra vires and null and void.

This Court granted appellant's petition for an appeal on March 15, 1971 and the case was submitted for decision on February 6, 1973 upon the briefs and oral arguments on behalf of the respective parties.

It appears from the facts, which are not in dispute in this case, that both municipalities were issued cease and desist orders from state and federal officials to stop polluting the Monongahela River and as a result the City of Morgantown secured the services of a consulting firm which recommended that it would be advantageous to both municipalities if only one sewage treatment plant were built to handle the sewage from both towns. Subsequently, on January 4, 1965 the two municipalities entered into the first of two agreements. The first agreement provided for the City of Morgantown to pay 87% Of the total cost of the construction of the interceptor sewers and the Town of Star City to contribute 13% Of the total cost. On August 16, 1965 the parties entered into a lease agreement whereby the Town of Star City agreed to pay 3% Of the cost of the construction of the treatment plant based upon the bid price and 3% Of the operating costs of the plant each year in return for the right to use 3% Of the capacity of the treatment plant.

After the contracts were entered into, the City of Morgantown raised its sewer rates in order to provide debt service on the subsequent revenue bonds that were sold to finance Morgantown's proportionate share of the costs of the new facilities. Both municipalities applied for federal funds for the project and their requests were granted. However, the grant to Star City was later withdrawn after Star City did not sell the revenue bonds for the financing of the project. The City of Morgantown subsequently offered to buy Star City's revenue bonds but the offer was not accepted. Star City also did not raise its sewer service fees. In 1968 Morgantown received approximately $35,000 in federal funds which were allocated to Star City as its share in the costs and which Star City agreed to allow to go directly to Morgantown.

It appears that problems began developing in May of 1965 when officials for Star City received a legal opinion from a Chicago law firm which raised doubts as to the legality of revenue bonds that Star City might issue because under the contracts with the City of Morgantown, Star City was not given any legal interest in the project. Morgantown was the only owner of the facilities and Star City was merely a lessee and hence, according to the legal opinion, the revenue bonds could not be sold because there was no collateral for the bondholders. This legal opinion was given on May 28, 1965 before the parties entered into the second agreement.

Star City has refused to pay its share of the construction costs but has paid 3% Of the operating costs of the treatment plant every year. In 1968, Star City negotiated with Morgantown to enter into a new agreement whereby Star City would be given a 3% Interest in the treatment plant but an agreement was never reached.

The case was tried without a jury and the Circuit Court held that the two contracts were legal and binding and Star City was obligated to pay $40,262 to the City of Morgantown together with interest from February 1, 1968 at the rate of 4%. This amount was determined as a result of a final audit by the Department of Health, Education and Welfare. The court further found that Star City was not entitled to an undivided interest in the treatment plant or interceptor sewer system.

The appellant has listed eight assignments of error in its brief but they can be consolidated into two assignments as follows: 1) The trial court erred in not making findings of fact and conclusions of law, as required by Rule 52(a), R.C.P.; 2) the trial court erred in holding that the Town of Star City had authority to enter into the contracts or agreements with the City of Morgantown and in not holding that the contracts were ultra vires and, therefore, null and void.

It is true that where a case is tried without a jury Rule 52(a), R.C.P. requires the trial court to find facts specially and state separately its conclusions of law thereon before the entry of judgment. The failure to do so constitutes neglect of duty on the part of the trial court and the case may be remanded for compliance. Pettry v. Chesapeake and Ohio Railway Company, 148 W.Va. 443, 135 S.E.2d 729. The purpose of this Rule is to better enable the reviewing court to apply the law to the facts. However, where there is sufficient information in the record with regard to the facts controlling the disposition of the case, it will be disposed of without remanding it to the trial court. 5A Moore's Federal Practice, § 52.06(1) (2d ed. 1971). The court's order in the case at bar contains findings of fact and conclusions of law sufficient for the disposition of this case and therefore the first assignment of error does not constitute reversible error. Commonwealth Tire Company v Tri-State Tire Company, W.Va., 193 S.E.2d 544.

The only question to be resolved in this case is whether or not the Town of Star City had the authority to enter into the two contracts or agreements with the City of Morgantown under the laws of this state. If it had the authority and the agreements are valid the Town of Star...