City of Sweetwater v. Hamner

• Citation: 259 S.W. 191
• Decision Date: 10 November 1923
• Docket Number: (No. 10768.)
• Parties: CITY OF SWEETWATER et al. v. HAMNER.
• Court: Texas Court of Appeals

Page 191

259 S.W. 191

CITY OF SWEETWATER et al. v. HAMNER.

(No. 10768.)

Court of Civil Appeals of Texas. Fort Worth.

November 10, 1923.

Rehearing Denied December 15, 1923.

Writ of Error Refused February 1, 1924.

Appeal from District Court, Nolan County; W. P. Leslie, Judge.

Suit by Ed J. Hamner against the City of Sweetwater and others, in which the United States Gypsum Company intervened. From judgment rendered, the defendants and intervener appeal. Affirmed.

A. B. Yantis and Harry R. Bondies, both of Sweetwater, Thompson, Barwise, Wharton & Hiner, of Fort Worth, and Douthit, Mays & Perkins, of Sweetwater, for appellants.

Ed J. Hamner, of Sweetwater, for appellee.

BUCK, J.

Ed J. Hamner filed suit against the city of Sweetwater, its mayor and two commissioners, seeking to restrain the respondents from extending the water mains of the city some 2½ miles beyond the city limits to the plant of the United States Gypsum Company. He alleged that under the charter of the city of Sweetwater the commissioners had the power to levy and collect within the city limits an annual tax of not exceeding 80 cents on each $100 worth of property as assessed for taxes, for general revenues, streets and bridges, and to pay the annual interest and provide for a sinking fund for all outstanding bond issues and other valid obligations owing by the city at the time of the adoption of the charter; that the commission also had the power to levy and collect such additional taxes as might be found necessary to pay interest and provide sinking funds for such additional issues of bonds for city purposes, authorized by the laws of the state of Texas and by the charter, when said proposed bond issues and tax levies had first been submitted to a vote of the people and by them adopted and approved; that the commission should have power to levy additional taxes for city purposes authorized by the vote of the people.

The charter further provided that the city of Sweetwater should have the power to buy, own, construct, or lease within or without the city limits, and to maintain and operate a system of waterworks, and to demand and receive compensation for services furnished for private purposes or otherwise, and to exercise the right of eminent domain thereinafter provided for in the appropriation of lands, right of ways that might be proper and necessary to efficiently carry out said objects.

He further alleged that the charter provided that:

"To have the right to acquire, own, erect or lease, maintain and operate waterworks and waterworks system for the use of the city of Sweetwater and its inhabitants, to regulate the same and have power to prescribe rates for water furnished and to acquire by purchase, donation or otherwise, suitable grounds within and without the city limits on which to erect any such works and the necessary right of way, and to do and perform whatsoever may be necessary to construct, operate and maintain the said waterworks system and to compel the owners of all property and the agents of such owners or persons in control thereof to pay all charges for water furnished upon such property. To provide that all receipts from the waterworks may, in its discretion, constitute a separate or sacred fund, which shall be used for no other purposes than the extension improvement, operation, maintenance, repair, and betterment of said waterworks system or waterworks supply and to provide for the pledging of any such receipts and revenues for the purpose of making of any such improvements and the payment of the principal and providing an interest and sinking fund for any bond issue therefor, under such regulations as to the issuance of bonds as is provided by this charter and the General Laws."

And that there are no other provisions of said charter covering said subject-matter or that is contrary to, or variant with, same.

He also alleged that article 17, § 3, of the charter, provided:

"That the revenues derived from the operation of any of such public utility plants shall be appropriated and used only for the payment of operating expenses, for maintenance, interest and depreciation accounts, for replacements and betterments and for the payment of interest and providing a sinking fund for any outstanding bonds or indebtedness created or assumed for the purpose of the purchase, construction or improvement of any such plant, together with at least three (3) per cent. on its gross earnings to be applied to an emergency fund for the sole use and benefit of said utility plant; that the rates of service may be so regulated as to produce sufficient revenue to pay when due the charges required herein."

He further alleged that pursuant to the powers invested in it by the charter the said city of Sweetwater had heretofore bought and constructed and now owned a system of waterworks whereby and from which it furnished its citizens and industries within its limits water at a specified price and thereby received, acquired, and has a large annual revenue, to wit, approximately $28,000 per year, and has had such annual revenue for a long time since; that in order to pay for said system of waterworks said city of Sweetwater, in due form of law, created a bonded indebtedness of $315,000 in the form of bonds issued by said city, $310,000 of which said bonds bore 5½ per cent. interest per annum and mature in 1954, and $5,000 of said bonds bore 6 per cent. interest and matured in 1938, and in order to pay said interest and create a sinking fund the city of Sweetwater levied an annual tax on all taxable property within its limits of from 50 cents to $1 on each $100 valuation of such taxable property; that a small amount only of said annual revenues from said waterworks has heretofore been used or is now being used for operating expenses, or for replacements and betterments, not exceeding 50 per cent. of the revenues, and none of it is now or has ever been used to pay the interest and create a sinking fund for said outstanding bonds, or to provide the emergency fund specified in its charter, but the balance of said revenues has been and is now being unlawfully used to pay all kinds and classes of claims, debts, and obligations of the city; that, if said revenue from said waterworks was lawfully disbursed, it would provide a sufficient fund to take care of the maintenance and operating expenses of said waterworks and provide a sinking fund and pay the interest and provide the necessary emergency fund provided by law, and said tax of 50 cents to $1 now levied and collected by said city, would be unnecessary and the taxpayers, including plaintiff, would be relieved of said tax burden.

Wherefore plaintiff alleged that the manner in which said revenues is handled and disbursed by the defendants is illegal, unauthorized, and amounts in law to a misappropriation.

Relator further alleged that the commission of the respondent city of Sweetwater are intending to enter into a contract with a nonresident corporation, the United States Gypsum Company, to lay a pipe line 2½ miles outside of and beyond the limits of the city of Sweetwater, so as to convey water to the plant of said Gypsum Company, and to pay for said pipe line, labor, etc., by issuing interest-bearing warrants payable by the city of Sweetwater out of the revenues of the waterworks within 10 years with interest at 6 per cent. per annum, and by means of said pipe line so to be constructed said Gypsum Company is to be furnished water at the same price as is charged to resident taxpayers residing in the city limits of said city; that the contemplated cost of said pipe line is estimated to be $20,000, and that no part of same is to be paid for by said Gypsum Company. Wherefore it was alleged that said city of Sweetwater and its commissioners would thereby misappropriate and use and divert from the use designated by the law $20,000 of said revenues of said waterworks, plus the interest thereon for 10 years, and will create a bonded or interest-bearing indebtedness against the city of Sweetwater and its taxpayers without their consent in manner and form as provided by the charter and in violation of the law.

He further alleged that under the rules and regulations provided by the commission, if a taxpayer resident within the city limits wishes to purchase from the city water to be used on his premises, he is required to pay all expenses of tapping the city's main at its nearest point and for all piping and expenses in laying said pipe line to his premises and then pay additionally for the water used by him; that the United States Gypsum Company is not a resident of Sweetwater and pays no taxes to the city of Sweetwater, and the plant to be provided with water as herein alleged is 2½ miles distant from and outside of the city limits, wherefore, by the act of the city aforesaid, the city is discriminating against its citizens and taxpayers by compelling them to pay a greater rate or charge for water used by them than they are charging nonresidents and nontaxpayers, which acts are violative of that part of the charter which provides that:

"The rates charged for service furnished by any of the said municipal public utility plants shall be just and equitable and there shall not be allowed to any person, firm or corporation or to any officer or employé of said city, any service free of charge, except it may provide free service for buildings and institutions owned or operated by the city.

"That in determining the rates to be charged and collected for such service the cost of operation, maintenance, depreciations, replacements, betterments, interest charges and the creation of a sinking fund sufficient to pay principal and interest of any bonds issued for the acquirement, construction or improvement of any such public utility, shall be taken into consideration."

Relator alleged that he was a taxpayer in the city of Sweetwater on property above the valuation of $10,000, and that he had no adequate...