Southland Ice Co. v. City of Temple

• Decision Date: 04 January 1939
• Docket Number: No. 8860.,8860.
• Citation: 100 F.2d 825
• Parties: SOUTHLAND ICE CO. v. CITY OF TEMPLE.
• Court: U.S. Court of Appeals — Fifth Circuit

100 F.2d 825 (1939)

SOUTHLAND ICE CO. v. CITY OF TEMPLE.

No. 8860.

Circuit Court of Appeals, Fifth Circuit.

January 4, 1939.

Webster Atwell, of Dallas, Tex., for appellant.

W. O. Cox and W. R. Brown, both of Temple, Tex., for appellee.

Before HUTCHESON and HOLMES, Circuit Judges, and DEAVER, District Judge.

DEAVER, District Judge.

The Southland Ice Company sued the City of Temple for specific performance of a contract and in the alternative for damages.

The Company was the owner of certain real estate in the City of Temple, Texas. It had used this property as an ice manufacturing plant and cold storage plant. On or about July 29, 1937, the City Manager inquired of the Company's President whether the property was for sale. Upon receiving an affirmative answer and ascertaining the approximate sale price, the City Manager called a meeting of the Board of Commissioners of the city to be held in the afternoon of that day. He called the meeting by telephoning each member of the board and four of the five members attended the meeting. At this meeting a motion was passed authorizing the City Manager to purchase the property, the consideration to be $7,500 cash, $7,500 without interest to be paid later in the year and the cancellation of taxes on the property.

Under that authority, the City Manager sent to the Company a letter dated August 5, 1937, making the offer to purchase. On August 6, 1937, the President of the Company accepted the offer and advised the city that the Company would promptly remove all insulating materials, pipes, tanks, machinery, ice and refrigerating equipment from the building. The Company proceeded to remove that property and in doing so expended the sum of $1,039.41 prior to August 25, 1937, on which date the City Manager informed the Company by letter that the city at a meeting of the Board of Commissioners repudiated the contract. To restore the property to its former condition would cost $8,600.

Defendant has owned and operated the water and sewer department of the city for many years. It has invested in the plant and distribution system approximately a million dollars and the business has been for many years conducted at an annual profit of approximately $55,000. In connection with the operation of such business defendant has had to purchase and store large inventories. The City Manager and the four Commissioners who authorized the contract had in mind the purchase of the property for use as a store-room for the protection and preservation of such inventories. These inventories were necessary to the conduct of the water and sewer department.

The authority to buy the property was granted by the four Commissioners on oral motion and not by formal resolution or ordinance. The Commissioners in the meeting discussed informally the method of payment. It was discussed as a good plan to pay half of the purchase price out of the water-works fund and half out of the general fund.

The city was operating under a budget and there was nothing set up in the budget for the purchase of the property. There was money set up to buy a street sweeper and to do some repairs on the fire station. The Commissioners had in mind to forego the purchase of the street sweeper and the repairs to the fire station and use those funds to meet the deferred payment on the property. However, no action of any kind was taken with reference to the means or method of payment.

The city did not take possession of the property or receive any benefit from it.

Because of the repudiation of the contract, the Company brought suit for specific performance. Defendant answered that for reasons set forth the contract was void. Plaintiff amended, setting up estoppel to claim that the contract was illegal and praying for damages in the alternative.

Plaintiff announced at the beginning of the trial that it would no longer pursue the question of the remission of taxes.

The Court denied plaintiff any relief and rendered judgment for defendant. Plaintiff appealed.

Appellant, in numerous assignments of error, complains that the court erred in rendering judgment for appellee:

1. Because under the undisputed facts, the parties entered into a legally binding contract; and

2. Because, under the facts, appellee was estopped to assert mere irregularities in the action of the Commissioners in authorizing the City Manager to make the contract.

Appellee contended on the trial and contends here that the contract was illegal and unenforceable for the following reasons:

1. Because the meeting of the Board of Commissioners at which the contract was authorized was an illegal meeting.

The city charter provides as follows: "Special Meetings of the Board: The Mayor, any member of the Board of Commissioners, or the City Manager, may call special meetings of the Board at any time upon at least twelve hours written notice to each member, served personally or left at the usual place of business or residence of such member, or such meetings may be held at any time without written notice, provided all members of the board are present."

The notice given was less than twelve hours and was not given in writing, but was given by telephone, and one of the five members was not present. Appellee says the charter provision is mandatory.

Appellant quotes in part Article 1008, Texas Civil Statutes, as follows: "The mayor, of his own motion, or on the application of three aldermen, may call special meetings, by notice to each member of said council, the secretary and city attorney, served personally or left at their usual place of abode," and contends that the meeting was called in substantial compliance with that statute, and that if the charter provision be construed as mandatory, it is inconsistent with the statute and, therefore, unconstitutional under Article 11, Sec. 5, Texas Constitution, Vernon's Ann. Civ.St.

As bearing on that question, the following authorities are cited in the briefs: Mills v. City of San Antonio, Tex.Civ.App., 65 S. W. 1121; Young v. Taylor, Tex.Civ.App., 92 S.W.2d 1075; State v. Hellman, 120 Tex. 282, 36 S.W.2d 1002; Ikard v. City of Henrietta, Tex.Civ.App., 33 S.W.2d 578; Brewer v. State, 113 Tex.Cr.R. 522, 24 S. W.2d 409; Smith Bros. v. Lucas, Tex. Civ.App., 15 S.W.2d 27, affirmed Tex.Com. App., 26 S.W.2d 1055; McCutcheon v. Wozencraft, 116 Tex. 440, 294 S.W. 1105.

2. Because the city could not legally enter into the contract except upon formal resolution or ordinance. Appellee cites Watson v. City of Center, Tex.Civ.App., 286 S.W. 859; Peck v. City of Hempstead, 27 Tex.Civ.App. 80, 65 S.W. 653; Fayette County v. Krause, 31 Tex.Civ.App. 569, 73 S.W. 51.

Appellant cites City of Waco v. Prather, 90 Tex. 80, 37 S.W. 312; McNeal v. City of Waco, 89 Tex. 83, 33 S.W. 322; City of Tyler v. Jester & Co., 97 Tex. 344, 78 S. W. 1058, 1059.

3. Because the contract was not signed by the Mayor.

Appellee quotes a provision in the city charter requiring the Mayor to sign all contracts entered into by the city, and says the provision is mandatory. It cites City of Houston v. Dupree, 103 Tex. 292, 126 S.W. 1115; Cameron County, etc. v. De La Vergne Engine Co., 5 Cir., 93 F.2d 373; City of Hamlin v. Brown-Crummer Inv. Co., 5 Cir., 93 F.2d 680.

Appellant says that a contract authorized by the Commissioners is valid without the Mayor's signature, and cites: City of Ft. Worth v. First Baptist Church, Tex. Civ.App., 268 S.W. 1016; Sowell v. Griffith, Tex.Com.App., 294 S.W. 521; Wilke v. City of Ballinger, Tex.Civ.App., 31 S.W. 2d 1102; City of Houston v. Dupree, 103 Tex. 292, 126 S.W. 1115.

4. Because a part of the consideration to be paid for the property was the remission of certain taxes against the property.

Appellee refers to the Constitution, Article 11, Sections 4 and 6, Vernon's Ann. Civ.St.Tex., and to the city charter prohibiting the payment of taxes in anything except current money or funds of the United States, and contends that the illegality of a part of the consideration renders the entire consideration illegal and the contract unenforceable, citing Edwards County v. Jennings et al., 89 Tex. 618, 35 S.W. 1053; Wicks et al. v. Comves et al., 110 Tex. 532, 221 S.W. 938.

Appellant, recognizing that the provision in the contract for remission of taxes is not valid, says that the waiver of that provision in the beginning of the trial left the contract valid and enforceable, citing Sayles v. City of Abilene, Tex.Civ.App., 290 S.W. 239, affirmed Tex.Com.App., 295 S.W. 578, and the Wicks Case, supra.

5. Because the contract attempted to create a debt in violation of the state constitution and the city charter.

Article 11, sec. 5, of the Texas Constitution, Vernon's Ann.Civ.St.. provides: "And no debt shall ever...