Guadalupe-Blanco River Authority v. Tuttle

• Decision Date: 03 March 1943
• Docket Number: No. 11278.,11278.
• Parties: GUADALUPE-BLANCO RIVER AUTHORITY et al. v. TUTTLE et al., Board of Trustees.
• Court: Texas Court of Appeals

Page 520

171 S.W.2d 520

GUADALUPE-BLANCO RIVER AUTHORITY et al. v. TUTTLE et al., Board of Trustees.

No. 11278.

Court of Civil Appeals of Texas. San Antonio.

March 3, 1943.

Rehearing Denied May 12, 1943.

Appeal from District Court, Forty-Fifth District, Bexar County; John F. Onion, Judge.

Suit by W. B. Tuttle and others, Board of Trustees of the San Antonio Electric and Gas System, against Guadalupe-Blanco River Authority and others, to enjoin defendants from interfering with plaintiffs' possession and control of a utility plant. From an order granting a temporary injunction, named defendant and another appeal.

Order reversed and temporary injunction vacated.

E. M. Cape and Tom G. Oliver, Jr., both of San Marcos, Fred L. Blundell, of Lockhart, and A. J. Wirtz, W. S. Gideon, and D. W. Glasscock, all of Austin, for appellants.

S. J. Brooks, W. L. Matthews, and W. F. Nowlin, all of San Antonio, for appellees.

PER CURIAM.

This is an appeal from an order granting a temporary injunction based upon the application of the members of the "Board of Trustees" of the San Antonio Electric and Gas System appointed and created by an ordinance of the City of San Antonio passed in accordance with Article 1115, Vernon's Ann.Civ.Stats. This ordinance incorporated therein a certain contract between the City of San Antonio and Harris Trust and Savings Bank of Chicago and Harold Eckhardt, Trustee, of Evanston, Indiana, representing the prospective purchasers of revenue bonds of the issue also authorized by the ordinance.

The Board of Trustees which filed this suit consisted of W. B. Tuttle, Walter P. Napier, D. F. Youngblood, Franz C. Groos and C. K. Quin, who, as Mayor of the City of San Antonio, was ex officio a member of said Board.

The defendants below were the City of San Antonio, a home rule city and a municipal corporation, Guadalupe-Blanco River Authority and Lower Colorado River Authority, conservation and reclamation districts, created by special acts of the Legislature of the State of Texas.

The basis of the Board's complaint insofar as the temporary injunctive relief sought is the alleged want of authority on the part of the contracting parties, and the invalidity or illegality of a portion of a contract entered into by and between said City of San Antonio and the Guadalupe-Blanco River Authority, whereby said City leased to said Authority a steam generating electric plant located and situated in Comal County, Texas, in and near the City of New Braunfels, for a period of thirty years, coupled with an option to purchase at the end of the lease period. This contract was assigned by the Guadalupe-Blanco River Authority to the Lower Colorado River Authority.

From the order granting the temporary injunction the two Authorities have prosecuted this appeal.

We have concluded that the order appealed from must be reversed and the temporary injunction vacated for the reason that the Board of Trustees is not such a party or entity as may assert in this cause the contentions upon which the temporary injunction is necessarily based.

It is made certain by their petition and by their testimony that, as plaintiffs, the members of the Board of Trustees do not sue as individuals, nor as citizens or taxpayers of the City of San Antonio, nor in behalf of said City, nor in behalf of the holders of the revenue bonds of the City, issued in accordance with the terms of the ordinance which also created the Board of Trustees, nor in any other capacity than as members of said Board.

The powers and duties of the Board of Trustees were fixed and are therefore limited by the express or necessarily implied provisions of the contract contained in the ordinance mentioned. Those provisions are, simply and ultimately, that the appointed Board of Trustees shall control, manage and operate the purchased utility system until the revenue bonds issued for the purchase thereof shall have been fully paid. Although the details and manner of the performance of its duties are left largely to the discretion of the Board, it is clear that its powers are also derived from and consequently dependent upon the provisions of the contract contained in the ordinance. Beyond the powers and duties therein conferred the Board cannot go.

No character of title to the purchased properties is vested in the Board under the contract, or by the statute authorizing said contract, Article 1115, supra. Title to the system is held by the City, subject only to the lien thereon securing the payment of the purchase price revenue bonds. The Board is given no express authority as a Board of Trustees to sue or be used in connection with their management of the system, and the power to maintain as a "Board of Trustees" or members of a "Board of Trustees," the demands upon which injunctive relief granted in the lower court was based can not be implied from the mere power to control and operate the property in behalf of its owner, the City of San Antonio. The members of the Board are agents of the City, and their authority is limited to that conferred by the contract of their creation and appointment. Sifford v. Waterworks Board of Trustees, Tex.Civ.App., 70 S.W.2d 476, writ refused; San Antonio Independent School District v. Waterworks Board of Trustees, Tex.Civ.App., 120 S.W.2d 861, writ refused.

The Board of Trustees in this suit do not purport to maintain that part of the asserted cause of action upon which the temporary injunction is based in the name of or on behalf of the City of San Antonio or the holders of its revenue bonds.

The cited cases of Sifford v. Waterworks. Board of Trustees and San Antonio Independent School District v. Waterworks Board of Trustees, supra, involved the legal status and powers of the Waterworks Board of Trustees of the City of San Antonio. We have examined the record in the first mentioned case, which is on file in this Court. From that examination we find that the powers of that Board were conferred by the same processes as those by which appellees' powers were conferred, and that those powers are substantially the same. In the Sifford case the plaintiff sued the Waterworks Board for damages sustained through alleged negligent operation of the Waterworks System by the Board. The trial court sustained the general demurrer to plaintiffs' petition because suit cannot be maintained against the Water Works Board of Trustees and the Trustees thereof as such."

This Court, in an opinion by Chief Justice Fly, approved the ruling of the trial court. In the opinion it was said that: "There was, however, no allegation that the water board was a separate entity from the city, or that it had been chartered by the state, but all of the allegations tend to show that the water board was merely a department and agency of the city to take charge of and operate for the city its water system, just as the departments of the fire and police were created for the purposes of obtaining protection from fire and protection from criminals violating the laws. The property is owned by the city, and the department of water is as much under the control and management of the city, through its trustees, as is the department of taxation, streets, police, and fire, except in some particulars stated in the deed of trust. It has been definitely settled by the decisions of different states of the Union that departments of the city created and acting in a similar way to that of the water board of the city of San Antonio could not be held liable for debt or tort, but that the city, if any one, was the party liable under such claims." Citing numerous authorities.

From what has been said, it follows that the order appealed from must be reversed and the temporary injunction vacated. However, said temporary injunction will be continued in force pending our disposition of motion for rehearing. Should no motion be filed our order vacating the injunction will become effective on March 19, 1943.

On Motion for Rehearing.

MURRAY, Justice.

The majority of the Court adheres to the original opinion, because to do otherwise would be to overrule Sifford v. Waterworks Board of Trustees, Tex.Civ.App., 70 S.W. 2d 476, and San Antonio Independent School District v. Waterworks Board of Trustees, Tex.Civ.App., 120 S.W.2d 861, in both of which cases the Supreme Court refused a writ of error.

However, in deference to the dissenting opinion of Chief Justice Smith, we have deemed it proper to discuss other phases of the case. The temporary injunction should be set aside because the petition therefor fails to allege an irreparable injury and likewise the proof fails to show any such irreparable injury. The "Board of Trustees" are in possession of the "Comal Plant" — no one is attempting by unlawful means or force to interfere with their possession — and if they feel that it is their duty not to surrender the possession of such plant then all they have to do is to simply continue in possession of the same. The evidence shows that the same competent individuals will operate the plant whether it is theoretically in the possession of the "Board of Trustees" or of the Colorado River Authority, that the books are being so kept that regardless who should be ultimately shown to be entitled to operate the plant an accounting can easily be made. Under such circumstances there is no showing which will justify the harsh remedy of a temporary injunction.

Furthermore, a fair construction of all the instruments having a bearing upon the deal show that the Board of Trustees are not entitled to hold possession of the Comal Plant, and that it is under the record as shown here their duty to deliver the same to the Colorado River Authority.

The purchase of the property of the San Antonio Public Service Company, the sale of the revenue bonds (whereby the purchase money was provided), the lease of the Comal Plant to the Guadalupe-Blanco River Authority, and the sub-leasing of the same to the Colorado River...