Texas Water & Gas Co. v. City of Cleburne

• Decision Date: 06 December 1892
• Citation: Texas Water & Gas Co. v. City of Cleburne, 21 S.W. 393, 1 Tex.Civ.App. 580 (Tex. App. 1892)
• Parties: TEXAS WATER & GAS CO., to Use of BONNER et al., v. CITY OF CLEBURNE.
• Court: Texas Court of Appeals

Page 393

21 S.W. 393

TEXAS WATER & GAS CO., to Use of BONNER et al., v. CITY OF CLEBURNE.

Court of Civil Appeals of Texas.

December 6, 1892.

Appeal from district court, Johnson county; J. M. Hall, Judge.

Action by the Texas Water & Gas Company, for the use of T. R. Bonner, E. C. Williams, and J. B. Henderson, against the city of Cleburne, to specifically enforce a contract to deliver certain bonds. From a judgment for defendant, plaintiff appeals. Affirmed.

W. S. Herndon and B. B. Cain, for appellant. Crane & Ramsey, F. A. Fisher, and D. T. Bledsoe, for appellee.

TARLTON, C. J.

This suit was brought November 8, 1889, in the district court of Johnson county, by the Texas Water & Gas Company, for the use of T. R. Bonner, E. C. Williams, and J. B. Henderson, against the city of Cleburne. The plaintiff prays as follows: (1) For a decree specifically enforcing a certain contract by which the appellee agreed to issue and deliver 51 good and valid bonds of $1,000 each in payment for certain waterworks constructed for appellee by appellant, and for interest which has accrued upon said contract since its completion by appellant, and for a writ of mandamus to enforce such decree. (2) For the recovery of the value of said waterworks, alleged to be the sum of $51,000, in the event that the court should refuse specific performance. (3) For the recovery of the waterworks themselves, together with all the rents, issues, and profits, and the right to operate the same, as now located in the city of Cleburne, in the event that the court should refuse to decree specific performance, or to give judgment for the value of the waterworks.

The facts relied upon by appellant for recovery, as alleged in its petition, are as follows: On September 13, 1883, the city of Cleburne adopted an ordinance authorizing its mayor and city secretary to execute a contract with appellant for the construction of a system of waterworks, and, on compliance by appellant with its contract, to execute and deliver to it 51 bonds for $1,000 each, due 20 years after date, with 40 coupons for $35 each attached to each bond, the coupons falling due semi-annually, the last maturing July 1, 1905. The ordinance provided that the revenues realized from the operation of the waterworks, over and above the expenditures, should constitute a fund to pay the interest and create a sinking fund for the final redemption of the bonds. It further ordained, for the purpose of paying said interest, the levy of an annual tax of one fourth of 1 per cent. on each $100 worth of property in the city; and it further ordained, in order to pay said interest, and to provide a sinking fund for the redemption of the bonds, the levy of an additional tax of one tenth of 1 per cent. to be collected under the power of the city "to levy and collect annual taxes to defray the current expenses of its local government." This levy of one tenth of 1 per cent. was to be in operative if it should be found that the preceding levy would be sufficient to pay the interest and sinking fund referred to. On September 13, 1883, the city of Cleburne, through its mayor, W. N. Hodge, and its city secretary, W. H. Graves, under the authority of said ordinance, entered into a contract with appellant. On the part of the Texas Water & Gas Works, it was agreed to construct, on or before June 1, 1884, a complete system of waterworks, to be submitted to a prescribed test, in the presence of a committee of aldermen of the city, on a favorable report from which the company was to be discharged from further obligation on the contract. On the part of the city it was agreed to deliver to the Texas Water & Gas Company, on its compliance with the conditions named, the bonds and coupons described in the ordinance. In pursuance of its contract, the company completed the waterworks by July 3, 1884, and submitted them to the test provided for. They were accepted by the city, which, in the language of the petition, "took charge of them, and has ever since owned, held, and operated them as its own property, and for its own use, benefit, and profit." On July 3, 1884, W. N. Hodge as mayor, with the attestation of W. H. Graves as city secretary, of the city of Cleburne, delivered to the company the 51 bonds, together with the coupons, provided for in the contract and ordinance. These bonds bear date January 1, 1884. They are indorsed: "Registered on July 12, 1884. William J. Swain, Comptroller." Each bond contains the recital that it is "authorized by article 420, Revised Statutes of Texas, and by the ordinance already set out in conformity to article 420." Each also recites that it is secured by an ordinance of the city authorizing the levy and collection of a tax of 35 cents on the $100 worth of property to pay the interest and 2 per cent. sinking fund. The purported date of these bonds — January 1 1884 — is not their true date. They were actually signed July 3, 1884, when W. N. Hodge had ceased to be mayor. From the fact, however, that the bonds were issued under the contract of September 13, 1883, and were printed and engraved prior to the date, January 1, 1884, when Hodge was the mayor, the city council adopted a resolution authorizing W. N. Hodge to sign the bonds as mayor. By virtue of this resolution, W. N. Hodge signed the bonds as mayor, and they were delivered to the company, and accepted by it as valid bonds in payment of the $51,000, stipulated for by the contract. After its acceptance of the bonds, the plaintiff sold all of them to the parties for whose use this suit is brought, and received from them the money therefor. These parties are now the bona fide owners and holders of 33 of the bonds with all of the coupons attached thereto, which represent the interest beginning and running from July 1, 1884, and maturing semiannually on the 1st days of January and July. In the latter part of the year 1884 certain coupons first maturing were cut and sold to W. N. Coler, Jr., a nonresident, who, payment being refused, brought suit, in May, 1885, against the city of Cleburne, in the circuit court of the United States for the northern district of Texas, to enforce the payment of the coupons. The suit so brought — No. 759 — resulted, in February, 1887, in a verdict in favor of the defendant, on the ground that the bonds were not properly executed, and that the coupons were void. From this judgment, W. N. Coler, Jr., prosecuted an appeal to the supreme court of the United States, which, on May 13, 1889, affirmed the judgment of the circuit court, (9 Sup. Ct. Rep. 720,) holding the bonds to be void, because they were signed by W. N. Hodge as mayor, when in fact he was but a private citizen. The plaintiff has in all things complied with its contract. It has completed the waterworks, which the defendant has accepted, used, and operated. The defendant has not paid the consideration of $51,000 according to the contract. It has not delivered 51 valid bonds, but it has issued 51 worthless bonds, which the plaintiff holds for the use of the parties named in this suit, and which, together with the coupons, plaintiff is ready to deliver up for cancellation. The defendant has paid no consideration for the waterworks, but has refused the demand of the plaintiff, made in the name and for the use of all the holders of the bonds, to execute and deliver 51 good and valid bonds, according to its agreement. The defendant city addressed to the petition a general demurrer and divers special exceptions, all of which were sustained. The action of the court in sustaining this demurrer and these exceptions gives rise to the questions which we shall proceed to consider

1. Was the city of Cleburne empowered, under the constitution and laws of the state, to enter into the contract set out in the plaintiff's petition? If it was not so authorized, the plaintiff is not entitled to the decree for specific performance for which it prays. If Cleburne was a city of more than 10,000 inhabitants, this question would require an answer in the affirmative, because cities of the latter class, at the date of this contract, were empowered for municipal purposes, including the purpose of protection against fire, here in contemplation, to levy a tax of 2½ per cent., — a limit far in excess of that named in the contract under consideration. Muller v. City of Denison, (decided by us Nov. 1, 1892,) 21 S. W. Rep. 391. The petition contains no averment that Cleburne is such a city, and the failure to so aver is the subject of appellee's twelfth special exception. As the purpose of the suit is to enforce the performance of a contract by the city, it would devolve upon appellant to prove that Cleburne was a city such as could enter into the contract in question. Gould v. City of Paris, 68 Tex. 518, 4 S. W. Rep. 650. Such proof would require corresponding allegations, and in their absence the petition would be obnoxious, at least to special exceptions, such as were addressed to it. The appellant urges that the court erred in sustaining the general demurrer to his petition in this respect, and invokes the doctrine that on general demurrer every reasonable intendment will be indulged in favor of the sufficiency of the petition. As, however, in connection with the general demurrer, the court acted upon the special exception referred to, and as the latter was properly sustained, we do...