Selected Investments Corp. v. City of Lawton

• Decision Date: 20 November 1956
• Docket Number: No. 36442,36442
• Citation: 304 P.2d 967
• Parties: SELECTED INVESTMENTS CORPORATION, a Corporation, Plaintiff in Error, v. The CITY OF LAWTON, Oklahoma, a Municipal Corporation, Defendant in Error.
• Court: Oklahoma Supreme Court

Page 967

304 P.2d 967

1956 OK 306

SELECTED INVESTMENTS CORPORATION, a Corporation, Plaintiff in Error, v. The CITY OF LAWTON, Oklahoma, a Municipal Corporation,

Defendant in Error.

No. 36442.

Supreme Court of Oklahoma.

Nov. 20, 1956.

Rehearing Denied Dec. 18, 1956.

Syllabus by the Court.

1. In Oklahoma, municipalities do not usually own the fee simple title to streets and parkings in front of private residences; nor does the annexation of an addition to a city, after dedication of its streets and public ways to public use, ordinarily convey fee simple title in such property to the city; and the title to a network of pipes and mains for distribution of city water laid underground in such addition before such annexation does not pass to the city by reason thereof, where the city, at the time of the annexation, recognizes the title to said network of those who paid for its construction.

2. In the operation of a water system as a private utility, a city has the same contractual rights and liabilities as a private corporation; and, in an action, by the owner thereof, to replevin a water distribution network from a city, judgment may be rendered as in any other replevin action.

Appeal from the District Court of Comanche County; Floyd L. Jackson, Judge.

Action by plaintiff to replevin from defendant a network of water pipes and mains rented by the city to distribute city water to residences in two city additions. From a judgment for defendant, plaintiff appeals. Reversed and remanded with directions.

John Barry, LaJolla, Cal., John W. Tyree, Lawton, Fletcher Riley, William F. Collins, Jr., and Arthur Leach, Oklahoma City, for plaintiff in error.

Logan, Godlove & Cummins, Lawton, for defendant in error.

Felix, Douglass & Griffin, Sylvanus G. Felix, and John T. Spradling, Oklahoma City, on the brief, amicus curiae.

BLACKBIRD, Justice.

As the parties to this appeal appear in the same order in which they appeared in the trial court, they will herein be referred to by their trial court designations.

By the action there instituted, plaintiff corporation sought to replevin pipes and other equipment comprising the water distribution systems, it, and its subsidiary and predecessor in interest, Home Building & Supply Company, hereinafter referred to by the abbreviation: 'H. B. S.', caused to be installed in, and to serve with city water, two residential areas which originally were unimproved vacant land, but later became the Lee and Selected Investments Center Additions of defendant city.

In two separate alleged causes of action, plaintiff, in its amended petition, alleged, among other things, its ownership, and right to immediate possession, of these water distribution systems, and that, notwithstanding a demand plaintiff had made upon said defendant City on a certain date in December, 1952, that it return them, said City had, ever since said date, unlawfully held, controlled, and refused to return them to plaintiff. For relief, plaintiff prayed the court to enter judgment against the City requiring it to return the systems, or, if this could not be done, to pay plaintiff their actual value, which, in the instance of the Lee Addition system (involved in plaintiff's first cause of action) was alleged to be the sum of $15,640.08, and, in the instance of the Selected Investments Center system (involved in its second cause of action) was alleged to be $28,026.02.

In returning the writ of replevin issued in said cause, the Sheriff reported that as the property involved was buried underground, he could not take physical possession of it. Accordingly, at the trial plaintiff introduced uncontradicted evidence of the reasonable value of the pipe and equipment, as installed, on the theory that the component parts of neither distribution system could be physically returned to it.

Due to disagreement in the parties' appellate argument concerning the significance that should be given various facts pertaining to what may be referred to as the 'equities' of plaintiff's position, and to afford a better understanding of the parties' respective positions, we think it worth while to set forth a rather detailed statement of the background facts leading up to the filing of this action, despite the fact that, in reaching our conclusions, the facts considered will be only those pertinent to the issues of replevin, which, of course, is a purely legal, as distinguished from an equitable, action. This will accord with the trial court's ruling, toward the end of the trial, that plaintiff's pleadings be deemed amended to conform to the proof only to the extent relevant to the issues of a replevin action.

In the Spring of 1947, plaintiff owned all of the area now known as the Lee Addition; and defendant City was in the throes of a rapid post-war population increase, which posed expansion problems. As plaintiff desired development of the area as a city residential section, its manager, Mr. F. A. Lee, before the area was platted as a city addition, conferred with defendant's Mayor and City Engineer concerning such a project and was told that the City did not have sufficient funds on hand to extend its water lines into the area, but said officials promised that if plaintiff company would go ahead and install the necessary mains and equipment to distribute water to the area, such system could be connected with the City system, and the City would thereafter reimburse plaintiff its costs of constructing the system at the rate of $1 per month for each home or consumer unit that 'tapped' the system to purchase water from the City. Apparently, a part of the plan and agreement was for the new area's distribution system to be built according to specifications approved by the City Engineer, and for the area, when it had been platted and the system completed, to be annexed by the City as an addition thereto. Accordingly, on March 11, 1947, plaintiff filed in the County Clerk's office its 'Owners Certificate and Dedication' along with a plat of the area referring to it as the 'Lee Addition.' In said Certificate and Dedication, it was specifically recited that there was dedicated to the 'public use all * * * streets, drives, avenues, alleys and thoroughfares as shown on' the plat 'free and clear of all encumbrances whatsoever.' According to Mr. Lee, there was a period during which complete agreement between his company and the City was stalemated due to plaintiff's reluctance to set aside, or dedicate, a part of the area as a city park, which was desired by the City Park Board. However, subsequently, plaintiff advised the City Council, by letter read in its meeting of May 13, 1947, that it had dedicated 10 lots in a certain block for that purpose. The letter also stated that the Lee Addition's coming into the City would have to be delayed until the existing contracts plaintiff had entered into for the installation of the water lines had been completed, at which time the exact cost thereof would be submitted to the City, so that plaintiff could be reimbursed therefor. Later, when the Addition's water distribution network was completed to the satisfaction of the City Engineer (who designated how far from the streets and property lines in the parkings the mains should be placed) and of the Fire Chief (who designated where fire hydrants should be installed) plaintiff wrote the Mayor and City Council, under date of August 15, 1947, inclosing a statement of the cost of said system as '16,188.84', and indicating plaintiff's desire that the 'Addition' be brought into the City at a specified early date. Thereafter, at one of its meetings during the month, specifically on September 16, 1947, there was presented to the City Council a new statement of the cost of the system totalling only $15,618.31, wherein the fee of the firm of consulting engineers, who had had over-all supervision of it, was scaled down to less than one-half of its original figure, and other deductions were made for the cost of certain fire hydrants. In connection therewith, there was also presented for the council's consideration and action, a draft of a proposed written contract entitled: 'Lease Agreement', which had the dual purpose of allowing defendant City to lease, and/or to purchase, the water distribution system from plaintiff. The rental provided to be paid for the term of the lease, which was from July 1, 1950, to July 1, 1960, was to be paid plaintiff by defendant from the money the latter received from the sale of city water to users, whose residences were connected with the system, at the rate of $1 per month for each such residence or residential or user unit. According to one paragraph of the contract, the City had to exercise its option to purchase the system from defendant for $15,618.31, less deductions from said price of any amounts theretofore received by plaintiff from defendant under the terms of the lease, 'on or before the 1st day of July, 1950.' (There is some contention that this paragraph is in conflict with a paragraph immediately preceding it allowing defendant until January 1, 1960, to exercise its option; and that consequently the lease was ambiguous. But, since the suit involved herein is a replevin action, rather than an action on the contract, or to reform it, such asserted ambiguity may be disregarded). At the aforementioned meeting, the City Council passed a resolution authorizing the Mayor to execute the lease on behalf of the City, and, according to the minutes of the meeting, the following additional proceedings occurred:

'Cameron (apparently a Council member) asked unanimous consent that the City of Lawton will make their first payment on the water line in the Lee Addition on June 30, 1950, which will cover January 1, 1950, through June 30, 1950, making a period of six months, then thereafter yearly payments will be made. The payment will be $1.00 per month for each house that is occupied.

'No Objections. It is so ordered.'

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