City of Pontiac v. Ducharme

• Decision Date: 28 December 1936
• Docket Number: No. 79.,79.
• Parties: CITY OF PONTIAC v. DUCHARME.
• Court: Michigan Supreme Court

278 Mich. 474

270 N.W. 754

CITY OF PONTIAC

v.DUCHARME.

No. 79.

Supreme Court of Michigan.

Dec. 28, 1936.

Suit by the City of Pontiac, a municipal corporation, against Lloyd S. Linton and Thaddeus Seeley, individually and as copartners doing business as Seeley & Linton, William H. Ducharme, and others. From an adverse judgment, the plaintiff appeals, claiming relief only as against William H. Ducharme.

Affirmed.Appeal from Circuit Court, Oakland County, in Chancery; Xenophon A. Boomhowever, Judge.

Argued before the Entire Bench, except POTTER, J.

William A. Ewart, of Pontiac, for appellant.

Henry C. L. Forler, of Detroit (Frank W. Atkinson, of Detroit, of counsel), for appellees William H. and Frances Ducharme.

NORTH, Chief Justice.

By its bill of complaint the City of Pontiac seeks cancellation of a contract under which it was purchasing from defendants Ducharme a parcel of land to be used for a sewage disposal site; and also the city seeks to be reimbursed for payments heretofore made on the contract and for payments of taxes on the property. The bill of complaint was dismissed, and plaintiff has appealed.

The land contract, dated September 4, 1929, provided for the purchase of a parcel of land outside the city limits of Pontiac at a price of $87,460.72. At its inception the contract ran to Lloyd S. Linton as vendee. As a matter of fact, Mr. Linton was acting for the City of Pontiac as an undisclosed principal. Of this the vendors had no knowledge until some time later. The contract recites a down payment of $30,000, the balance of $57,460.72 to be paid in semiannual installments. On September 13, 1929, the vendee's interest was assigned to plaintiff herein which assumed and agreed to perform the contract. The city made five subsequent semiannual payments, each approximately in the amount of $7,000. The city also paid taxes on the property on three occasions, these taxes totaling upwards of $6,000. At and prior to the inception of this land contract, the city of Pontiac was experiencing an unusual growth. It became obvious that, among other municipal improvements, its sewage system must be extended and improved. The city, acting through Mr. Linton, decided to purchase the land in question for a sewage disposal site. It is a fair inference from the record that the city officials consummated this transaction in the name of Mr. Linton in the goodfaith belief that it would be advantageous for the city to proceed in that way. The contract was negotiated between Mr. Linton and one Clarence S. Vaughan, who represented the vendors.

It is the claim of appellant that the contract for the purchase of this land is void because the transaction is in violation of the city's charter and ultra vires. Pontiac has a city charter under the Michigan home-rule act. 1 Comp.Laws 1929, § 2228 et seq. By its charter (chapter 2, § 1) the city is expressly vested with the following powers:

‘* * * (it) may acquire property in fee simple or lesser interest or estate by purchase * * * for any municipal purpose, * * * (it) may create, provide for, construct, regulate and maintain all things in the nature of public works and improvements; * * * may do any and all things needful, necessary or proper to furnish, supply, control and regulate water supply, sewage, sewage disposal, sanitation, and sanitary control within or without the boundaries of said city, upon such terms and conditions as the commission shall decide; * * * may exercise all powers which now or hereafter it would be competent for this charter to enumerate as fully and completely as though said powers were specifically enumerated herein; * * * all such powers, whether expressed or implied, shall be exercised and enforced in the manner as shall be provided by ordinance, resolution or the general laws of the State.’

Chapter 9, § 16, of the City Charter reads: ‘No public work or improvement shall be commenced, or expenditure made, nor any contract therefor by let or made (excepting as herein otherwise provided) until an appropriation has been made therefor or a special assessment shall have been levied to pay the cost and expenses thereof. No such work or improvement shall be paid for, or contracted to be paid for, except from the proceeds of such appropriation or special assessment or from the proceeds of bonds or other obligations issued in anticipation of the collection of such appropriation or special assessment.’

The charter contains the further provisions:

‘Bonds may be issued for the following purposes: Sewers, drains, sewage disposal and treatment works and for enlarging, improving or extending same; * * *’ Chapter 10, § 2.

‘Whenever the commission shall desire to issue bonds, they shall pass an ordinance, stating the amount of bonds to be issued and the purpose thereof, * * *’ Chapter 10, § 3.

‘The commission may establish, construct and maintain a sewage system, sewage disposal systems, sewers and drains whenever and wherever necessary, and of such dimensions and materials, and under such regulations as they may deem proper.’ Chapter 13, § 7.

Appellant's first contention is that because of the city's lack of expressed or implied power to enter into a contract for the purchase of land, the contract here in suit is ultra vires and void. In this connection appellant's counsel points out that cities have no powers not expressly conferred upon them by law or implied by other powers which are conferred, citing Ironwood Water Works Co. v. Ironwood, 99 Mich. 454, 58 N.W. 371;McCurdy v. County of Shiawassee, 154 Mich. 550, 118 N.W. 625. However, in this connection it is important to be mindful of decisions of this court subsequent to the passage of the home-rule act. ‘The new system [referring to the home rule act] is one of general grant of rights and powers, subject only to certain enumeratedrestrictions, instead of the former method of only granting enumerated rights and powers definitely specified. We must assume the act was passed with that intent and construe it accordingly.’ Gallup v. City of Saginaw, 170 Mich. 195, 135 N.W. 1060, 1062. Conceding the limitation of the powers of chartered cities, still we think appellant places too narrow a construction upon the pertinent charter provisions. Section 1 of chapter 2, above quoted, expressly empowers the city of Pontiac to acquire property either in fee simple or in some lesser interest or estate either by purchase or in other ways provided in the charter, such as gift, condemnation, etc. It would be placing too narrow a construction upon the power of the city to acquire property ‘by purchase’ to hold that the city could not enter into a contract to purchase such property. Hence it cannot be said that such an undertaking was ultra vires or not within the charter powers of the city.

Nor can appellant's contention be sustained that the Pontiac city charter provision, if construed as broadly as above indicated, will include a power in excess of those which may be give to cities under the home rule act of this state. Instead the act contains the following provision:

‘Each city may in its charter provide: * * *

‘(2) For the acquisition by purchase, gift, condemnation, lease or otherwise of private property, either within or without its corporate limits * * * for any public use or purpose within the scope of its powers, whether herein...