Whitehaven Utility Dist. of Shelby County v. Ramsay

• Decision Date: 11 December 1964
• Parties: The WHITEHAVEN UTILITY DISTRICT OF SHELBY COUNTY, Tennessee, Appellant, v. Jack W. RAMSAY, Dan C. Mitchell and Bruce Jordan, Board of County Commissioners of Shelby County, Tennessee, Shelby County, Tennessee, C. W. Baker, Chairman of the Shelby County Court, City of Memphis, Tennessee, and George F. McCanless, Attorney General of the State of Tennessee, Appellees. 19 McCanless 435, 215 Tenn. 435, 387 S.W.2d 351
• Court: Tennessee Supreme Court

Page 351

387 S.W.2d 351

The WHITEHAVEN UTILITY DISTRICT OF SHELBY COUNTY Tennessee, Appellant, v. Jack W. RAMSAY, Dan C. Mitchell and Bruce Jordan, Board of County Commissioners of Shelby County, Tennessee, Shelby County, Tennessee, C. W. Baker, Chairman of the Shelby County Court, City of Memphis, Tennessee, and George F McCanless, Attorney General of the State of Tennessee Appellees.

19 McCanless 435, 215 Tenn. 435, 387 S.W.2d 351

Supreme Court of Tennessee.

Dec. 11, 1964.

E. W. Hale, Jr., Memphis, for appellant.

Eugene Greener, Jr., Memphis, for Jack W. Ramsay, Bruce Jordan and Bd. of County Comrs. of Shelby County.

William H. Williams and John T. Dunlap, Jr., Memphis, for Dan C. Mitchell, and C. W. Baker.

Patrick Johnson, Sr., and Myron A. Halle, Jr., Memphis, for City of memphis.

WHITE, Justice.

This bill was brought under the Declaratory Judgments Act by Whitehaven Utility District of Shelby County, Tennessee, to have declared for it the exclusive right to maintain and operate a system or systems for furnishing water, fire protection, sewers, and sewage disposal service in the boundaries of the District. This Utility District was created pursuant to the Utility District Act of 1937, as amended. T.C.A. Secs. 6-2601-2636.

The defendants constructed the sewers involved herein and have since operated and maintained them. It is undisputed also that the defendants have been in control of and have been the owners and operators of said sewerage system for a period of more than eight years.

Demurrers were filed to the complainant's bill and were sustained upon the following grounds:

1. That the action of the complainant with reference to the construction of Days Creek, Cypress Creek, and Neely Road sewers constituted a waiver and/or estoppel of any right the complainant may have, and renders the complainant guilty of laches barring its right to bring this action.

2. That any exclusive franchise which complainant may have originally had relative to sewers within its boundaries has been lost by nonuser.

3. That the relief sought by complainant would, if granted, cause a forfeiture of valuable property and property rights of the defendants and would unjustly enrich the complainant.

The complainant now appeals from the adverse ruling below. In reaching our decision as to the correctness of the chancellor in sustaining the demurrers, we have carefully examined and weighed the following uncontroverted facts.

On July 16, 1954, the Utility District, the appellant here, not having the economic capabilities to develop its own sewer trunk line, entered into a written contract with a private developer for the construction of needed sewers with the cost of the same to be paid for by connection or tap charges. In addition, the City of Memphis and the County of Shelby also entered into a written agreement with the Utility District, whereby the District was given permission under certain terms and conditions to connect the privately developed sewer line to the City's disposal plant.

The latter agreement governed and restricted the Utility District's right to make or permit extensions or connections to its own sewer; it contained requirements for the application, handling, and accounting for the charges by the Utility District; it provided for the inspection and audit of the District's books by the City and the County; it required that plumbing in all houses using the sewer comply with Code standards of the City of Memphis; and lastly, it granted the City valuable rights to the sewer in the event of annexation of the District by the City.

On July 12, 1955, the City and the County began construction of the Days Creek sewer within the Utility District's boundaries, and this sewer was completed during a period of ten months, on or about May 18, 1956. On September 14, 1955, the City and the County began construction on the Cypress Creek sewer which was completed on October 15, 1956, a construction period of about thirteen months.

In addition, the Neely Road sewer line was built by the same parties during 1959-1960. The City and the County have also contracted, at various times, with private developers for the construction of laterals to the sewers. The total cost of construction to the City and the County has been approximately $750,000.00.

The complainant sought to have the Chancery Court declare that it had and now has the exclusive right to conduct, operate, and maintain a sewerage system within said District. Complainant's position is that under T.C.A. Sec. 6-2607 and T.C.A. Sec. 6-604, the District is given the exclusive right to conduct the operations herein contested and, therefore, the sewers now owned and operated by the City and County should be turned over to the Utility District.

T.C.A. Sec. 6-2607 outlines the powers of the District as follows:

'So long as the district continues to furnish any of the services which it is herein authorized to furnish, it shall be the sole public corporation empowered to furnish such services in the district unless and until it shall have been established that the public convenience and necessity requires other or additional services.'

In this case there has been no such judicial determination of public convenience or necessity as required by the statute. Therefore, the Utility District contends that it is possessed of an exclusive right to operate the sewers and is required by statute to do so. Further, the complainant contends that there could be no waiver of its rights to furnish sewers, etc., when the statute expressly provides that only the county court has jurisdiction to take away that right and, therefore, any attempted waiver of said right would be against public policy and void.

Complainant makes further arguments against each point sustained in the demurrers, however, in our view of this case, the aforesaid general statement of complainant's position is sufficient. We have carefully considered the equities on both sides and are convinced that there can be only one conclusion.

We think that the complainant is guilty of laches and, therefore, the demurrers were properly sustained. The courts are reluctant to sustain the defense of laches, and in a case where the delay in filing the suit can be reasonable explained or justified, such a defense will not be heard. Williamson & Co. v. Ragsdale, 170 Tenn. 439, 95 S.W.2d 922 (1936).

In this case, however, after considering all of the circumstances, we find the conclusion inescapable that the complainant is guilty of laches. In this case there has been a delay of over eight years in bringing this suit, during which time there has been prejudicial reliance by the defendants on the acts or silence of the complainant. There has been no attempt to explain or justify this delay...