Griffith v. Sowell

• Decision Date: 01 July 1926
• Docket Number: (No. 387.)<SMALL><SUP>*</SUP></SMALL&gt
• Citation: 287 S.W. 673
• Parties: GRIFFITH v. SOWELL et al.
• Court: Texas Court of Appeals

Page 673

287 S.W. 673

GRIFFITH v. SOWELL et al.

(No. 387.)^*

Court of Civil Appeals of Texas. Waco.

July 1, 1926.

Rehearing Denied November 4, 1926.

Appeal from District Court, Johnson County; Irwin T. Ward, Judge.

Suit by W. H. Griffith against D. S. Sowell and others, composing the Board of Water Commissioners, and others. Judgment for defendants, and plaintiff appeals. Reversed and remanded.

Goree, Odell & Allen, of Fort Worth, for appellant.

E. A. Rice, of Cleburne, and Lee, Lomax & Wren, of Fort Worth, for appellees.

GALLAGHER, C. J.

This suit was instituted by appellant, W. H. Griffith, a resident property tax payer of the city of Cleburne, against appellees D. S. Sowell and others, composing the board of water commissioners of said city, and A. M. Lockett & Co., Limited, a corporation, to restrain the execution and performance of a contract made on December 1, 1924, by said board of water commissioners with said A. M. Lockett & Co., Limited, for the purchase of certain waterworks machinery for the waterworks plant of said city. Said city of Cleburne, its mayor, and the members of its city council were made parties defendant and are appellees herein. The contract sought to be enjoined, as originally entered into, provided for the purchase of said machinery for the sum of $49,788, payable as follows: $5,000 on January 5, 1925; $10,000 upon delivery of the machinery; and the balance in 14 notes, 13 of the same being for the sum of $2,500 each and one for $2,208, the first of which was to be due 30 days after the erection of the machinery, and one every 30 days thereafter until the last was paid. The parties to said contract estimated at the time that it would take at least five months to manufacture, ship, and install said machinery, which would have made the first note mature not earlier than July 1, 1925, and the last one August 1, 1926, making the last 8 of said notes, aggregating $19,888, mature more than one year after the final execution of the contract. In addition to the contract price of the machinery, the board of water commissioners were to pay freight charges and cost of installation, estimated at the aggregate sum of $6,000. Said contract provided that all indebtedness arising thereunder, whether evidenced by notes or not, should be payable at New Orleans, and that deferred payments should bear interest at 6 per cent. per annum from date of shipment and should be a first lien on said property until said debt was paid. Said contract further provided that said Lockett & Co. did not relinquish their title to said property until it was fully paid for, and that, in case of default, said Lockett & Co. might declare the whole amount remaining unpaid then due and payable and without process of law take possession of said property, remove the same from the premises, and sell the same as under execution for the purpose of satisfying their demands. It further provided that the board of water commissioners should keep said property insured, with the loss, if any, payable to Lockett & Co. as its interests might appear. Said contract was registered as a chattel mortgage in the office of the county clerk of Johnson county on January 15, 1925.

Appellant instituted this suit on the 14th day of February, 1925. On March 24, 1925, the court granted a temporary injunction restraining appellees from proceeding further in performance of said contract, but, appellant having failed to make the bond required, the order granting said injunction was set aside and vacated.

Said original contract for the purchase of said machinery was modified by a supplemental contract in writing, dated May 15, 1925. By the terms of said supplemental contract, the board of water commissioners agreed, in substance, that all funds, including bonds or claims or bills receivable theretofore accumulated and the net receipts and revenues thereafter to be derived by said water department by operation of its waterworks system, over and above the necessary expense of operating the same, should be and were set aside and constituted a fund to be used solely for paying off and discharging its obligations, under its said original contract, and the notes to be executed thereunder until said obligations were fully satisfied, and declared that such funds and net receipts and revenues were there pledged to secure its said obligations. In consideration thereof, said Lockett & Co. agreed to relinquish and waive all claims or demands they had or might have ever asserted against any other revenues or income from any source whatsoever of the city of Cleburne, other than the revenues from the waterworks system as aforesaid. It was expressly provided in said supplemental contract that nothing therein should be taken as changing or modifying the original contract except as therein expressly stated, nor as a waiver on the part of Lockett & Co. of any lien, right, or remedy under said contract other than such as were expressly waived as above stated.

There was a trial to the court on May 31, 1925. The evidence shows that the city of Cleburne was operated under a home rule charter, adopted September 17, 1914; that said city had shortly theretofore acquired a waterworks plant; that it paid for the same with the proceeds of a bond issue in the sum of $128,000; that it, at the same time, improved and equipped said plant with the proceeds of a bond issue in the further sum of $50,000; and that all said bonds were outstanding at the time of trial. A copy of said charter was made a part of the statement of facts, and its applicable provisions will be hereinafter recited and discussed. The court rendered a final judgment denying appellant any relief, and he here presents said judgment for review.

Opinion.

Appellant presents several interesting questions for determination. We do not think it necessary to consider all of them. The first question presented is appellant's contention that the board of water commissioners were without lawful power or authority to execute said contract, and also without power or authority to pledge the revenues arising from the operation of said water plant for the payment of the obligations assumed therein.

The charter of the city of Cleburne provides for the creation of said board of water commissioners and the election of its members, and declares that such members shall be officers of said city. The principal provisions of said charter defining the duties of said board of water commissioners, and conferring authority upon them to perform the same, are contained in the following sections:

"Section 79. It shall be the duty of said board of water commissioners to take charge of, manage, maintain, operate, improve, extend, and enlarge the system of waterworks, its water supply and facilities, either in or outside of the limits of the city of Cleburne, fix water rates for consumers and users of water, and to establish and enforce such rules, regulations, charges, and restrictions with reference to the use, consumption, waste, payment, cut off, turn on, connection, and the general and detailed management of said plant and connections of any kind or character, as they may deem proper, expedient, and necessary and which are not inconsistent herewith. It shall be their further duty to fix, establish, change, and adjust the rates in such manner as shall seem to them to be equitable, fair, and just, and the same shall in no wise be disturbed by any other authority, except for fraud or gross injustice: Provided, that the rates for domestic purposes shall never be increased above the present rates, except by majority vote of the qualified voters of the city participating in an election, which said election shall be ordered by the council when requested by a majority of the board of water commissioners.

"Said department of the municipal government of the city of Cleburne, herein provided for, shall be known as the water department. It shall keep balanced accounts with the other departments of the city of Cleburne. It shall furnish said city water for sprinkling and fire protection and charge therefor at a rate which shall be reasonable, considering the cost of supplying the water and keeping and maintaining the plant; water required for all other purposes for the city government shall be furnished free by the said water department; and in order to furnish and supply the city with water for the above-mentioned purposes, the said water department shall arrange and provide such reasonable facilities as may be necessary for the meeting of these demands. * * *

"Sec. 83. All funds collected by or on behalf of the water department shall forthwith be delivered by the person collecting the same to the superintendent, and he shall daily deposit all funds coming into his hands with the treasurer of the city of Cleburne as the funds of the city, and the same shall be credited by the treasurer to the `waterworks fund' and shall not be drawn upon or expended, except as herein provided. All payments of money by said water department shall be made by the board of water commissioners by draft or check on said fund which shall, in addition to the other formalities, state accurately and specifically the purpose for which it is given, and shall be signed by the superintendent and attested by the president and the secretary of the board; and said fund shall not be drawn upon in any other manner and said officers shall not sign or attest any warrant, draft, or check unless they personally know the same to be drawn for the purpose specified. After the payment of the expenses of maintenance and extensions of the water system, the board of water commissioners shall annually set aside the surplus until $10,000 has been accumulated in a fund known as the `waterworks sacred fund,' which shall not be used except in the case of emergencies, but which may be invested under the terms of this charter. When said fund amounts to $10,000, then the board of water...