McDonald v. Price

• Decision Date: 27 January 1915
• Docket Number: 2694
• Citation: 146 P. 550,45 Utah 464
• Court: Utah Supreme Court
• Parties: McDONALD v. PRICE et al

146 P. 550

45 Utah 464

McDONALD v. PRICE et al

No. 2694

Supreme Court of Utah

January 27, 1915

Appeal from District Court, Seventh District; Hon. A. H Christensen, Judge.

Action by B. R. McDonald against Price, a municipal corporation, and others.

Judgment overruling a demurrer to the complaint and granting the relief prayed for. Defendants appeal.

AFFIRMED.

C. C McWhinney, M. P. Braffet, Ferdinand Ericksen and Samuel A King, for appellants.

Price & Fouts for respondent.

FRICK, J. STRAUP, C. J., and McCARTY, J., concur.

OPINION

FRICK, J.

The plaintiff brought this action as a taxpayer of Price, a municipal corporation, hereafter called corporation, against said corporation; against the mayor and councilmen thereof; against its treasurer; and against one Manson, who is the lessee under a certain lease entered into by said corporation as lessor, and which the plaintiff, for reasons hereafter stated, asked to have vacated and annulled. The plaintiff, in his complaint, in substance, alleged the corporate existence of said corporation, and that Gunderson was its mayor, and the other five defendants the councilmen; that Hunten was its treasurer; and that J. H. Manson was the lessee under a certain pretended lease entered into by said corporation with him whereby said corporation, on the 31st day of March, 1914, pretended to "lease for a period of five years all of the lands, buildings, machinery, appliances, tools, and fixtures constituting the lighting and generating plant" owned by said corporation to said Manson. The facts respecting the making of said lease, and the terms and conditions thereof, are set forth in detail, and it is alleged that said lease is void and of no effect, for the reason that the mayor and councilmen, acting for said corporation, had failed and neglected to comply with the provisions of the laws of this state in entering into said lease; that said Manson is in possession and control of said plant; that a demand upon said mayor and council to vacate said lease and to take possession of said lighting plant and operate it for the use and benefit of said corporation and its inhabitants had been made and refused. The defendants appeared and joined in a general demurrer to the complaint. The court overruled the demurrer, and, after the defendants had elected not to plead further, but to abide by their demurrer, the court entered judgment canceling said lease, and ordered the lessee to surrender the leased property to said corporation. The defendants appealed, and entered into a supersedeas bond staying the execution of said judgment pending appeal.

Plaintiff's counsel contend that the lease in question is invalid: (1) Because the mayor and city council had no authority under the law to sell the lighting plant; and (2) because they refused to comply with the provisions of chapter 69, Laws Utah 1913, p. 110, in which the particular method which must be pursued by the city authorities in leasing such property is specifically provided for.

The first contention is based upon the claim that the cities of this state do not possess the power to sell and dispose of their property which is devoted to, and used for, corporate purposes. As to property such as streets, alleys, parks, public buildings, and the like, although the title is in the city, yet such property, it may be said, is held in trust for strictly corporate purposes, and, as a general rule, cannot be sold or disposed of so long as it is being used for the purposes for which it was acquired. Lighting plants do, however, not come within that class. Waterworks and righting plants which are used by the cities of this state for the purposes of distributing water, light, and power or either, to the inhabitants for profit, are held by what is usually termed a proprietary right and unless prohibited by some statute, may be sold, leased, or disposed of by the city at any time when, in the judgment of the authorities, it is for the best interests of the city to do so. While, under the Constitution of this state, cities may not sell or dispose of their water systems, yet they hold and operate them in a proprietary, and not in a governmental, capacity. The same rule applies to lighting plants. Brown v. Salt Lake City, 33 Utah 222; 93 P. 570; 14 L. R. A. (N. S.) 619; 126 Am. St. Rep. 828; 14 Ann. Cas. 1004; Ogden v. Waterworks & Irr. Co., 28 Utah 25; 76 P. 1069. The first contention must therefore fail.

The second proposition, as we have seen, is, however, based upon a special act. That act, in substance, provides: That whenever the authorities of any city or town shall deem it advisable to sell its lighting plant, then they shall cause an appraisement to be made of the property which is to be sold or leased as in the act provided; that said authorities shall also submit the question of whether said plant shall be sold or leased to the vote of the qualified electors of such city or town at a general election or at a special election called for that purpose. The manner of holding and conducting the election is provided for in the act. It is further provided that, in...