Town of Worland v. Odell & Johnson

• Decision Date: 16 September 1958
• Docket Number: No. 2805,2805
• Citation: 79 Wyo. 1,329 P.2d 797
• Parties: The TOWN OF WORLAND, Wyoming, a municipal corporation, Plaintiff and Respondent, v. ODELL & JOHNSON, Contractors, a partnership, and Veterans Homes Company, a corporation, Defendants and Appellants.
• Court: Wyoming Supreme Court

Page 797

329 P.2d 797

79 Wyo. 1

The TOWN OF WORLAND, Wyoming, a municipal corporation, Plaintiff and Respondent, v. ODELL & JOHNSON, Contractors, a partnership, and Veterans Homes Company, a corporation, Defendants and Appellants.

No. 2805.

Supreme Court of Wyoming.

Sept. 16, 1958.

Robert R. Rose, Jr., Casper, for appellants.

Floyd D. Gorrell and Frank B. O'Mahoney, Worland, for respondent.

Before BLUME, C. J., and HARNSBERGER and PARKER, JJ.

Mr. Chief Justice BLUME delivered the opinion of the court.

This is an action brought by the Town of Worland, a municipal corporation organized as a town, against Odell & Johnson and Veterans Homes Company for declaratory judgment as to the liability of the town under the circumstances hereinafter mentioned. Odell & Johnson, on behalf of the Veterans Homes Company, filed cross petitions demanding either judgment against the town for $25,808.57 on account of the refusal of the town to carry out the contract hereinafter mentioned or that the appellants recover that amount from the town under equitable principles, that is to say under an implied contract or for money had and received. The case was tried below on a stipulation of facts, the essentials of which are substantially as follows: The Town of Worland is a municipal corporation organized as a town by virtue of the laws of the State of Wyoming. The Veterans Homes Company apparently is the owner of the socalled Evans Addition to the Town of Worland, which addition has been such at all times. On August 27, 1948, the mayor and town council of the town established a Board of Public Utilities in accordance with Ch. 105, S.L. of Wyoming, 1947. Negotiations were had between the Veterans Homes Company and the members of the Board of Public Utilities in reference to the development of the Evans Addition. On January 20, 1950, the Board of Public Utilities adopted the following resolution:

'Howard McClellan moved that all owners of the subdivision in the Town of Worland, stand the cost of installation and materials of sewers and water system in and to the subdivision, the sum to be repaid to said owners from the revenue less the expenses of operation and maintenance, from the individual areas, or available surplus; said installation to be made by the Town of Worland, George Donnell seconded the motion. Motion carried.'

Three of the council of five of the Town of Worland were present at the meeting of the board and objected to any agreement between the Board of Public Utilities such as contained in the resolution above mentioned. On March 27, 1950, three members of the council were present at one of its meetings, and the minutes of that meeting state as follows:

'Representatives from Decker Addition, Evans Addition, and the Pulliam Development were present and discussed with the Council, the matter of accounting for the funds involved in the developing of the above additions. The Council referred the problem to the Board of Public Utilities.'

The minutes of that meeting are somewhat obscure and in the affidavit of one of the three councilmen above mentioned it is stated as follows:

'4. That on March 27, 1950, he [the affiant] attended a meeting of the Town Council at which were in attendance representatives of Decker, Evans and Cloud Peak Additions to the Town of Worland; that said representatives were present at said council meeting for the purpose of discussing the matter of accounting for the funds involved in the development of said additions for the installation of sewer and water therein; that councilmen Lowe and McClellan with affiant were the only council members present, and councilman Lowe was acting mayor; that said council refused to take any action in the matter and refused to take the responsibility for said project, referring said representatives to the Board of Public Utilities;

'5. That affiant has at all times opposed said project. * * *'

The Board of Public Utilities through its own agents constructed water and sewer lines and made connections with houses in the Evans Addition, and the Veterans Homes Company paid for such installation from time to time up to and including February 11, 1953. The cost of the construction was no more than the reasonable value both for the material as well as the labor in connection with such water and sewer extensions, and the amount of $25,808.57 is the reasonable value for such installation. Pursuant to the agreement, the Veterans Homes Company intended to, and did in fact, build 130 homes in the Evans Addition to the town. No fund was ever created to repay the Veterans Homes Company for the payments which it made to the town. All householders in the addition are charged as to water and sewer the going rate for such services as said rate is prevalent throughout the Town of Worland for similar services. The town receives the amounts for such services and enjoys an increased tax receipt resulting from the increased valuation of the properties upon which the homes in the Evans Addition in question have been built. The charges so made to the users of the facilities in the Evans Addition do not include any amount by reason of the extension of the sewer and water mains. (But see below.) Further, at the time of the sale of the residences within the area of the Evans Addition in question, none of the householders were advised that any additional charge of any kind whatsoever would be made upon them to defray the cost of the sewer and water extensions in that area. After a certain number of homes were constructed, the Board of Public Utilities notified the Veterans Homes Company that the board would no longer be responsible for water and sewer installation costs and expenses. The date is not given but it was apparently soon after the last payment made by the Veterans Homes Company. It seems that the actual connection of the water and sewer lines in the Evans Addition with the water and sewer mains in the town was made by the Veterans Homes Company. After the latter company was advised that the Board of Public Utilities would no longer extend any sewer or water lines, the company raised the sale price of its homes thereafter built to pay for water and sewer facilities. As late as March 23, 1955, Francis Hillard, Office Manager of the Board of Public Utilities, wrote to Odell and Johnson that the Board of Public Utilities was indebted to them in the amount of $20,582.06 and he stated further, 'The Board is ancious (sic) to liquidate this debt as soon as is possible, and any further development along this basis has been discouraged so as to expedite means of repayment of all debts already incurred.' At least until February 16, 1954, the Board of Public Utilities recognized that the Town of Worland had received substantial benefits through increased assessment values from the Evans and other additions and that they would provide approximately $12,000 annually in taxes to the Town of Worland and that repayments of the advances made by the Veterans Homes Company and others should be repaid.

The case at bar involves only the Evans Addition. As a matter of fact, a similar arrangement was made with the owners of two other additions, and the total loans made amounted to about fifty-two thousand dollars which is hardly a small amount when considering the population of the Town of Worland which, according to the census of 1950, was 4,202.

The trial court found generally in favor of the plaintiff and against the defendants, holding the alleged agreement in contravention of law and that the plaintiff is under no obligation to pay the amount demanded by the defendants. From that judgment the defendants have appealed to this court and will hereafter be mentioned as the appellants.

1. Appellants filed a motion for summary judgment because appellee failed to give a table of cases in its brief as provided by Rule 12(c)(4), Rules of the Supreme Court of Wyoming, December 1, 1957. The rule did not go into effect until after the appeal in this case was taken. Appellee filed a motion to dismiss the appeal because the notice of appeal was served on the same day on which the judgment of the trial court was entered. We see no reason why that may not be done. Both motions are overruled.

2. Validity of the Contract.

The substance of the contract herein is that the board borrowed money from the appellants for the purpose of constructing an extension of waterworks and sewer works, the money borrowed to be repaid out of the rentals received from the extensions made. We find no statutory authority for the Board of Public Utilities to borrow any money, nor do we find statutory authority for paying any loan in the manner provided in the contract. See Lakota Oil & Gas Co. v. City of Casper, 57 Wyo. 329, 116 P.2d 861, 867, and authorities therein cited. See also Annotation, 71 A.L.R. 828. The town, not the Board of Public Utilities, had power to pledge the revenues from the waterworks and sewer works in connection with the issuance of revenue bonds, but these bonds could be issued only pursuant to a vote of the people. Laverents v. City of Cheyenne, 67 Wyo. 187, 217 P.2d 877. Moreover, Article 3, § 37, of our Constitution provides:

'The legislature shall not delegate to any special commissioner, private corporation or association, any power to make, supervise or interfere with any municipal improvements, moneys, property or effects, whether held in trust or otherwise, to levy taxes, or to perform any municipal functions whatever.'

We construed this provision in Stewart v. City of Cheyenne, 60 Wyo. 497, 154 P.2d 355. We held in that case that under this constitutional provision a board of public utilities is under the general control of the town or city council and it has no other powers except those which are administrative. The authorization of an extension of water mains or a sewer system is not an administrative power but is a power which is legislative. 63 C.J.S. Municipal Corporations §...