Incorporated City of Humboldt v. Knight

• Decision Date: 12 March 1963
• Docket Number: No. 50919,50919
• Citation: 120 N.W.2d 457,255 Iowa 22
• Parties: The INCORPORATED CITY OF HUMBOLDT, Iowa; and the Board of Trustees of the Humboldt Municipal Waterworks, and Oscar Holden and G. P. Ruse, as members of the Board of Trustees of the Humboldt Municipal Waterworks, Appellants, v. Guy KNIGHT and Gladys Knight, Appellees.
• Court: Iowa Supreme Court

Page 457

120 N.W.2d 457

255 Iowa 22

The INCORPORATED CITY OF HUMBOLDT, Iowa; and the Board of Trustees of the Humboldt Municipal Waterworks, and Oscar Holden and G. P. Ruse, as members of the Board of Trustees of the Humboldt Municipal Waterworks, Appellants, v. Guy KNIGHT and Gladys Knight, Appellees.

No. 50919.

Supreme Court of Iowa.

March 12, 1963.

Rehearing Denied May 7, 1963.

John E. Miller, Humboldt, for appellants.

Linnan, Lynch & Straub, Algona, and B. C. Berge, Garner, for appellees.

LARSON, Justice.

This is an action for declaratory judgment brought by the City of Humboldt asking that the court declare a certain written agreement, duly executed and recorded in Humboldt County, between one John Johnston and the Town of Humboldt, set forth as Exhibit A, null, void, and unenforceable. Its principal contention is that the contract entered into July 5, 1904, was an ultra vires act on the part of the town and therefore void. The trial court rejected that contention and held defendants, successors in title to Johnston, were not subject to a recent ordinance of the city setting water rates for all users within its corporate limits, but were entitled to receive water free from the city indefinitely. We cannot agree.

While appellants set forth seven propositions relied upon for reversal, we need consider only the first, which is that 'The court erred in concluding that the agreement (Exhibit A) was not an ultra vires act by the town.'

In substance, Exhibit A gave to the town, now the City of Humboldt, the perpetual use of a portion of his farm, designated as Government Lot 1, located within the town limits for a spring water supply, a water tower site, and for laying water transmission pipes, and gave to Johnston, his heirs representatives or assigns, such an amount of water free as was reasonably necessary for the stock kept on the farm, for household and for other farm purposes. Until recently this agreement was honored by all parties, although in 1933 the spring went dry, the water tank was torn down in 1960, and Lot One had been divided and the defendants Guy Knight and Gladys Knight own only the part on which the buildings were situated. The portion subject to the servitude is now owned by another.

While there is some contention defendant failed to show a proper transfer of the right to water from Johnston as required in Exhibit A, we need not concern ourselves with that question here. The nub of this controversy is whether under the law as it existed at the time of the agreement, the town was permitted to enter into such a contract. A close examination of the statutes as they then existed will perhaps disclose the extent of the power granted cities and towns to furnish and sell water to their inhabitants and others.

I. It is well settled in this jurisdiction that municipalities have only those powers granted them by the legislature, or which arise from fair implication and those necessary to carry out powers expressly or impliedly conferred. Cedar Rapids Com. Sch. Dist. v. City, 252 Iowa 205, 208, 106 N.W.2d 655; City of Des Moines v. Reiter, 251 Iowa 1206, 1210, 102 N.W.2d 363. Such grants are strictly construed against the authority claimed. Gritton v. City of Des Moines, 247 Iowa 326, 331, 73 N.W.2d 813; Mason City v. Zerble, 250 Iowa 102, 108, 93 N.W.2d 94. In Van Eaton v. Town of Sidney, 211 Iowa 986, 989, 231 N.W. 475, 476, 71 A.L.R. 820, this court, in considering the powers granted municipalities by the legislature, said: 'A municipality is wholly a creature of the Legislature, and possesses only such powers as are conferred upon it by the Legislature; that is, (1) such powers as are granted in express words; or (2) those necessarily or fairly implied in or incident to the powers expressly conferred; or (3) those necessarily essential to the identical objects and purposes of the corporation as by statute provided, and not those which are simply convenient. Dillon Municipal Corporations (5th Ed.) § 237; (and other citations).'

In Keokuk Waterworks Co. v. Keokuk, 224 Iowa 718, 731, 277 N.W. 291, 299, we again considered this authority, and after quoting the above from the Van Eaton case, said: 'But a different rule is applied when dealing with the exercise or carrying into effect of powers expressly or plainly granted.' This rule taken from 1 Dillon on Municipal Corporations, 5th Ed., Section 239, page 453, was set out as follows: 'The rule of strict construction does not apply to the mode adopted by the municipality to carry into effect powers expressly or plainly granted, where the mode is not limited or prescribed by the legislature, and is left to the discretion of the municipal authorities.' (Emphasis supplied.) These rules, we take it, are, as Judge Dillon said, 'indisputably settled.'

In 1 McQuillin, Municipal Corp., 2d Ed., page 925, also quoted in the Keokuk Waterworks case, it is stated: 'When the authority to exercise the power appears, wide latitude is allowed in its exercise, and, unless some abuse of power or a violation of organic or fundamental right results, it will be upheld. A municipal corporation, when exerting its functions for the general good, is not to be shorn of its power by mere implication. The intention to restrict the exercise of its powers must be manifest by words so clear as not to admit of two different or inconsistent meanings.' (Emphasis supplied.)

In Lyon v. Civil Service Commission, 203 Iowa 1203, 1209, 212 N.W. 579, 581, we stated the rule thusly: 'It is elementary that, unless expressly or impliedly restrained by statute, a municipal corporation may, in its discretion, determine for itself the means and method of exercising the powers conferred thereon.' It was under this rule a contract to furnish sewage disposal was upheld in the case of Des Moines v. West Des Moines, 239 Iowa 1, 30 N.W.2d 500, and the furnishing of electrical power was upheld in the case of Incorporated Town of Sibley v. Ocheyedan Elec. Co., 194 Iowa 950, 187 N.W. 560. In each case service was provided by contract to outside users rather than to residents within the corporate limits, and the requirement that rates be fixed by ordinance was not applied.

Two vital questions present themselves in the case at bar. Was the Town of Humboldt duly authorized by the legislature to furnish water to its inhabitants and, if so, was its method of sale restricted by statutory provisions sufficiently clear to exclude sales by contract to the residents therein? It is appellants' position that the Town of Humboldt had no authority to furnish Johnston or his assigns water under the purported contract, that it was authorized to sell water to its residents only at rents or rates fixed by ordinance, and its power to sell otherwise was clearly and specifically denied the municipality. We are inclined to agree.

An examination of the legislative authority delegated to cities and towns for the establishment and operation of water-works within its corporate limits in 1904 is necessary. In Title V, Chapter 4, of the Supplement, Code of Iowa, 1902, § 720, I.C.A. § 397.1 grants municipal corporations the 'power to purchase, establish, erect, maintain and operate * * * waterworks, * * * with all the necessary reservoirs, mains, filters, streams, trenches, pipes * * * and lease or sell the same.' This section, of course, delegates power to establish and operate a waterworks in the Town of Humboldt and, had it stopped there, appellees' contention that in its proprietary capacity the town could sell, barter or contract for this service, would perhaps be sound. Keokuk Waterworks Co. v. Keokuk, supra; City of Des Moines v. Horrabin, 204 Iowa 683, 215 N.W. 967; Incorporated Town of Sibley v. Ocheyedan Elec. Co., supra; Des Moines v. West Des Moines, supra; 37 Am.Jur., Municipal Corporations, § 66, page 679. However, Section 724, I.C.A. § 397.27 goes on to provide: 'They shall have power, when operating such works or plants, to assess from time to time, in such manner as they shall deem equitable, upon each tenement or other place supplied with water, * * * reasonable rents or rates fixed by ordinance, and to levy a tax, as hereafter provided, to pay or aid in paying the expenses of running, operating, renewing, extending and repairing...