City of Tuskegee v. Sharpe

• Decision Date: 28 June 1973
• Citation: 288 So.2d 122,292 Ala. 14
• Parties: The CITY OF TUSKEGEE, a municipal corporation, et al. v. Andrew V. SHARPE. SC 47.
• Court: Alabama Supreme Court

Page 122

288 So.2d 122

292 Ala. 14

The CITY OF TUSKEGEE, a municipal corporation, et al. v. Andrew V. SHARPE.

SC 47.

Supreme Court of Alabama.

June 28, 1973.

Rehearing Denied Jan. 24, 1974.

Gray, Seay & Langford, Tuskegee, for appellants.

Russell, Raymon & Russell, Tuskegee, for appellee.

COLEMAN, Justice.

Respondents appeal from decree for complainant in suit to compel specific performance of a contract granting complainant an option to purchase land.

Complainant is a natural person. Respondents are the City of Tuskegee which is a maunicipal corporation in Macon County, the mayor of the city, and five persons who are the duly elected members of the city council.

Complainant alleges that the city is the owner of certain land in Macon County comprising 659.67 acres, more or less; and that on September 22, 1964, the city council entered an ordinance on its minutes that the land was not needed for public or municipal purposes and granted to complainant an option to purchase the land for a period of years. The option recites in substance as follows:

That at a regular meeting of the council on September 22, 1964, the council duly entered an ordinance on its minutes that the land was not needed for public or municipal purposes; that the mayor, under § 477(1), Title 37, Code of 1940, as amended, was directed to execute said option to complainant; and that the city, acting through its mayor, and complainant agree as follows:

1. that complainant shall have an option for the purchase of the land for three years from this date for the amount per acre herein specified; and the price shall be $125.00 per acre;

2. that complainant will pay to the city $1.00 per acre for the privilege of this option; and, in the event the option is not exercised by complainant within three years, the option shall be null and void unless renewed as herein provided; but should the option be exercised within three years, then the amount paid for the option shall be credited on the purchase price, 'and an additional credit of One Thousand Eight Hundred Dollars ($1,800) on the purchase price of the entire tract for the damage done to the said property by the cutting of timber by Atomedics, Inc.';

3. that should complainant desire to extend the option, it may be extended for an additional period of two years provided payment is made to the city of an additional sum of $1.00 per acre for such extension, and said payment shall be made not less than thirty days prior to the expiration of the three-year period of time herein specified;

4. that, should the option be extended for an additional period of two years, all provisions of the option for the original period of three years shall be incorporated into and be the same terms and conditions applicable to the two-year extension of the option.

The date of the option is October 1, 1964. It was signed and acknowledged by the mayor, the city clek, and complainant.

Complainant avers that on September 30, 1964, he paid $659.67 to the city for the option; that he renewed the option for an additional period of two years by paying to the city $659.67 on August 23, 1967, which was accepted by the city.

Complainant avers that on April 10, 1969, he notified the mayor and council that he was exercising the option to purchase the land for $125.00 per acre, subject to the credits in the option; that on July 9, 1969, a communication was received from attorneys for the mayor and council in which they refused to comply with the terms of the option; and that subsequent letters were received advising complainant that the council was of opinion that the option was not binding, and, therefore they were refusing to convey the land to complainant.

Complainant avers that in the communication from attorneys for respondents dated July 9, 1969, a check for $1,573.33 was mailed with the letter as a refund of the option payments made by complainant, with interest thereon, but said check was returned to the attorneys for respondents and was not accepted by complainant.

Complainant offers to pay the price as specified in the option and prays that the court will require respondents to deliver to him a deed conveying the land, and for general relief.

Respondents' demurrer to the bill was overruled.

Respondents filed answer and cross bill averring that the option was not valid and binding for reasons hereinafter discussed. In their cross bill respondents pray that the court declare that the action taken by the council in attempting to grant the option is null and void, that the option is null and void, and that complainant has no interest in the land.

On the hearing, certain facts were stipulated. As we understand the stipulation, it is agreed that the averments of the bill are true in so far as they recite that the city council did enter or undertake to enter the alleged ordinance authorizing the mayor to execute the option, that the mayor did sign the option, that complainant did make the payments of money and did undertake to exercise the option as alleged, that respondents did refuse to convey the land to complainant and did send the refund check to complainant and he refused to accept the refund.

It is further stipulated as follows:

on September 22, 1964, when the council adopted or undertook to adopt the ordinance authorizing the granting of the option, Rutherford was mayor, and Braswell, Gregg, Lumpkins, Sides, and Thompson were councilmen; and their terms of office expired thirteen days later on October 5, 1964 on October 5, 1964, the following took office: Keever, as mayor, and Gregg, Parker, Smith, Sides, and Buford as councilmen; and their terms expired October 7, 1968;

on October 7, 1968, the respondents took office, namely: Keever, as mayor; and Toland, Gregg, Bentley, Bulls, and Peterson, as councilmen, with terms expiring October 2, 1972.

Other facts are stipulated. On the hearing testimony was heard ore tenus. As may be appropriate other facts will be hereinafter mentioned.

The trial court rendered decree granting the relief prayed for in the bill and ordered respondents to execute a deed to complainant in accord with the terms of the option. Respondents assert that the decree is erroneous for the reasons next considered.

Respondents argue that the powers of a municipality are only the powers conferred on the city by statute, that no statute of this state gives a city the power to grant an option giving to another the right to purchase at his election real estate owned by the city as in the instant case, and, therefore, that the attempted execution of the option contract was beyond the power of the city and the option is void.

In an action against a city on a promissory note executed by the city, this court affirmed a judgment for the city. The judgment was based on a verdict returned after the trial court had given the general affirmative charge for defendant. Among other things, this court said:

"It is a general and undisputed proposition of law that a municipal corporation possesses and can exercise the following powers, and no others: First, those granted in express words; second, those necessarily or fairly implied in or incident to the powers expressly granted; third, those essential to the declared objects and purposes of the corporation, not simply convenient, but indispensable.' New Decatur v. Berry, 90 Ala. 432, 7 So. 838, 24 Am.St.Rep. 827; 1 Dillon on Mun.Corp. § 89; Smith v. Newbern, 70 N.C. 14, 16 Am.Rep. 766; Cook County v. McCrea, 93 Ill. 236; Wetumpka v. Wetumpka Wharf Co., 63 Ala. 611; Eufaula v. McNab, 67 Ala. 590, 42 Am.Rep. 118. City of Mobile v. Electric Street R.R., (141) (Ala.) (442,) 38 So. 127. The city of Greenville had no authority to execute the note sued on or to make the debt, which it evidences, a legal charge against the general fund of the municipality. No such authority was given the municipality by its charter. Acts 1870--71, p. 121. Nor by section 2950 of the Code of 1896 and Acts 1886--87, pp. 629, 1009. Police Jury v. Britton, 15 Wall. (U.S.) 556, 21 L.Ed. 251; Blackman v. Lehman, Durr & Co., 63 Ala. (547,) 550, 35 Am.Rep. 57; Garland v. Board of Revenue, 87 Ala. 223, 6 So. 402; Woolf v. Taylor, 98 Ala. (254,) 257, 13 So. 688; Webb v. City of Demopolis, 95 Ala. (116,) 131, 13 So. 289, 21 L.R.A. 62.

'. . .

'This court has always strongly maintained the doctrine, both as to private and municipal corporations, that contracts made by or with them, outside the pale of their corporate authority, confer no right, and that neither the making of an ultra vires contract nor the receiving of its benefits estops the corporation from setting up its invalidity. Chewacla Lime Works v. Dismukes, 87 Ala. 344, 6 So. 122, 5 L.R.A. 100; Sherwood v. Alvis, 83 Ala. 115, 3 So. 307, 3 Am.St.Rep. 695, and authorities there cited; New Decatur v. Berry, 90 Ala. 432, 7 So. 838, 24 Am.St.Rep. 827. . . .' Cleveland School Furniture Co. v. City of Greenville, 146 Ala. 559, 562, 563, 564, 41 So. 862, 863, 864.

The last mentioned case was cited with approval in Johnson v. City of Sheffield, 236 Ala. 411, 183 So. 265, and also in City of Bessemer v. Huey, 247 Ala. 12, 22 So.2d 325, decided in 1945.

In Huey this court affirmed a decree overruling demurrer to a bill to nullify a lease of city property. After considering the statutes then in effect, which provided that the city council ". . . shall have the management and control of . . . all of the property, real and personal, belonging to the city . . .," this court said 'It is clear from the foregoing that there is no express authority given to a city to sell or lease its real property,' citing and quoting, the Cleveland School case, supra. A statute subsequently enacted in 1953 purports to grant to a city power to sell and lease its real property. See: Act No. 843, 1953 Acts, Vol. II, page 1135, approved September 19, 1953; 1958 Recompilation of Code 1940, Pocket Parts, Title 37, §§ 477(1), 477(2).

The Court of Appeals...