66 The father was entitled to the custody, services, and earnings of plaintiffs during their minority (section 4368, Rev. Laws 1910), and was charged by law with the duty to support and educate them in a manner suitable to their circumstances (section 4367); and, if he could not reasonably afford to maintain and educate them in keeping therewith, he might, under the direction of the county court, defray the expense of such maintenance and education from the income of their individual property (section 6535), but the authority given by this section does not authorize the payment thereof from the corpus of the estate, in other words, from the capital. Being entitled to the services and earnings of the plaintiffs, and the duty to educate and maintain them being imposed upon him by law, and not having made any claim for such allowances in his lifetime, the sureties in this action cannot make such claim for him. To have entitled him to credit, the expenditures must have been made under the direction of the county court, and no claim is made that such authority was obtained. In Hutson v. Jenson, 110 Wis. 26, 85 N. W. 689, it is said: "A mother, who was also guardian of her minor children filed a report stating that all of said minors were living with her, and that she made no charge at that time on account of expenses, such as board and clothing, for any of the wards, and they continued to reside with her until her death, six months later, without her having receded from such expressed intention. * * The sureties on the guardian's bond were not entitled to an allowance for such board and clothing, when sued for a balance due from their principal." * See, also, 28 Corpus Juris, pp. 1118, 1119. From an examination of the entire record we are of the opinion that the judgment of the trial court is correct, and should be and is hereby affirmed CITY NAT. BANK OF FT. SMITH, ARK., V. INCORPORATED TOWN OF KIOWA et al. (No. 13329.) (Supreme Court of Oklahoma. Oct. 14, 1924, Opinion Withdrawn, Corrected, and Refiled and Rehearing Denied Nov. 25, 1924.) (Syllabus by the Court) 1. Municipal corporations 60-Officers may exercise only authority expressly granted or necessarily inferred. In this state the officers of municipal corporations have only such powers and can exercise such authority only as are expressly granted by law, or necessarily to be inferred as incidental to the exercise of those expressly granted. 2. Municipal corporations 60-Constitutional right to engage in business held not extension of powers of officers. Section 6, art. 18, of the Constitution, is a grant of power to municipal corporations in furtherance of the public policy of the state, and is not intended as an extension of the powers of municipal officers in the discharge of their official duties. 3. Municipal corporations 225 (3)-Property used by corporate entity may be conveyed by municipal authorities, but property dedicated to use of inhabitants may not be conveyed while suitable. Property owned and controlled by municipal corporations is of two kinds and characters, viz. (a) That which is owned by and devoted to the use of the municipality as a corporate entity, (b) that which is owned by the municipality but dedicated to the use service, and benefit of its inhabitants. Property of the first class, by the second subdivision of section 4762, Comp Stat. 1921, may be sold and conveyed by municipal authorities. Property of the second class, acquired by virtue of section 27, art. 10, Const., may not be so conveyed free from the public use for which it was acquired and to which it has been actually dedicated, so long as it is suitable or adequate for that purpose and its use has not been abandoned. 4. Municipal corporations 225 (4)—Author. ity of officers to convey municipally owned utility limited by election proposal and franchise ordinance. Where the voters of a municipality are asked to give their assent to the conveyance of a municipally owned water and light plant, and to grant a franchise to the purchaser, under the referendum provisions of sections 5 (a) and 5 (b), art. 18, Const., the extent of the authority thus granted to the municipal officers is limited by the terms of the proposal and of the franchise ordinance so submitted at the election held for that purpose. 5. Municipal corporations 225 (4)—Proposal, franchise ordinance, and conveyances of municipally owned utility must be construed together in determining municipal officers' authority. In such case the proposal, the franchise made pursuant to the authority so granted ordinance, and thereafter the conveyances constitute one entire contract and must be considered and construed together in determining the extent of the authority granted to the municipal officers by the people under such referendum. 6. Municipal corporations 225(3) — Ordinance granted purchaser of municipal utility, notice to all persons claiming under it adversely to municipality's reserved rights. Where, by the terms of such ordinance, the franchise holder is expressly limited to one method of thereafter conveying such property, viz., with the burden of its public use, and such all these matters being shown and referred to ordinance is accepted in writing, the record of in the instruments of conveyance, the limitation on the power to convey is binding on the franchise holder and constitutes notice to all persons claiming under it adversely to the reserved rights in the public use of the property 7. Municipal corporations (230 P.) 225 (3) — Public | valued by them at $48,000, and they divided policy forbids acquisition of private rights this amount of stock of the Kiowa Waterin public utility which would result in prop- | works, Light & Power Company between the erty's destruction. The public policy of this state forbids that public utilities shall be willfully destroyed, or that public funds shall be diverted from the purposes for which they are voted, and where a waterworks and electric light system have been constructed from the proceeds of a bond issue authorized by section 27, art. 10, Const., public policy likewise forbids that private rights shall be acquired therein the enforcement of which I would have that result. Commissioners' Opinion, Division No. 1. Appeal from District Court, Pittsburg County; Harve L. Melton, Judge. Action by the City National Bank of Ft. Smith, Ark., against the Incorporated Town of Kiowa and others. From a judgment denying a part of the relief prayed for, plaintiff appeals. Modified and affirmed. The facts of this case, substantially as stated in plaintiff's brief, are these: Prior to March 15, 1918, the incorporated town of Kiowa, in Pittsburg county, owned a plant for the furnishing of electric and water service to the inhabitants thereof. February 23, 1918, the board of trustees of the town passed an ordinance, known as "Ordinance No. 103," granting to Kiowa Waterworks, Light & Power Company, and to its successors and assigns, a franchise to operate light, power, and waterworks systems in the town. The proposal leading to the enactment of this ordinance was made by Milo T. Crane and E. G. Burnley with the understanding that they should incorporate a company to receive the franchise. Prior to the adoption of this ordinance, and on December 3, 1917 the proposal of Crane and Burnley had been submitted to the voters of the town by referendum, and the voters had authorized the board of trustees to sell the rights, titles, interests, and equities of the town "in the operation and use of the plants * so far as it could be legally done," and to grant a franchise to the purchasers. March 11, 1918, Ordinance No. 103 was submitted to the voters of the town under sections 5 (a) and 5 (b), art. 18, Const., and was by them ratified and adopted Kiowa Waterworks, Light & Power Company filed its acceptance of the ordinance with the town clerk in writing as required by the terms of the ordinance. Pursuant to the authority granted by the voters, the president of the board of trustees and the town clerk on March 15, 1918, executed a deed and a bill of sale covering all of the physical properties of the light and water system to Kiowa Waterworks, Light & Power Company, and these instruments were placed of record. Crane and Burnley paid for the property $2,500 in cash and $2,500 in light and water service. The property was * two. No other payment on the stock was Plaintiff's petition was in the usual form of actions on promissory notes, and asked for foreclosure of the mortgages and an order to sell the property. There was no appearance by either Burnley or the light and water company. The town answered by general denial; alleged affirmatively that at the time of the execution of the notes and mortgages by the company to Burnley he was indebted to the company more than $12,000 for unpaid stock, and that the notes were without consideration; denied the power and authority of the company to mortgage or otherwise convey the property free from the public use; and pleaded all proceedings and public records connected with the transfer of the property by the town and the granting of the franchise; alleged the binding force of the acceptance of Ordinance No. 103 by the company; alleged the dedication of the property to public use, and denied the authority of the town's officers to convey the same free of such public use. There were numerous other allegations in the answer not deemed material to a consideration and disposition of the case Reply was filed, in effect denying notice of the matters alleged in the answer. Trial was had January 9, 1922, resulting in a judgment in favor of plaintiff for $6,366, with interest in the sum of $629, and for $500 attorney fee as against Burnley and the light and water company; denying plaintiff's prayer for foreclosure and for sale of the property; adjudging title to the property to For other cases see same topic and KEY-NUMBER in all Key-Numbered Digests and Indexes be in the incorporated town of Kiowa, but, as a necessary corollary, but the correctness adjudging that the town should pay to plain- of the second statement may include the cortiff the sum of $2,500. From this judgment, rectness of the first statement, and render after unsuccessful motion for new trial, available the arguments made under the plaintiff has brought the case here for re- other eight propositions. If the second stateview by petition in error with case-made at- ment be found to be incorrect, then the first tached. In the record and briefs the light statement becomes wholly immaterial, and and water company is variously referred to the arguments under the other eight propoas Kiowa Waterworks, Light & Power Com-sitions become futile because the basis for pany Kiowa Ice, Light & Water Company, their support has fallen. Because of the and Kiowa Light & Water Company. It will manifest importance of this second statebe hereafter referred to as Kiowa Water-ment, and the dependence of all other propworks, Light & Power Company, as it is des- ositions on its correctness, it will be first conignated in the franchise ordinance. sidered. James B. McDonough, of Ft. Smith, Ark., for plaintiff in error. Guy L. Andrews, of McAlester, for defend ants in error. LOGSDON, C. (after stating the facts as above). There are sixteen assignments of error in the petition in error, but these are reduced to and covered by nine propositions in the brief and argument of plaintiff. As stated by plaintiff at page 37 of its brief: "The principal questions arising on the record relate to: (1) The power of the town of Kiowa to sell its water and light plant to the Kiowa Ice, Light & Water Company; (2) the right of the latter company to mortgage all the property to E G. Burnley for the purpose of securing said Burnley for the money advanced to said company by said Burnley; (3) the validity of the collateral notes and mortgages heretofore described; (4) the plaintiff had nothing whatever to do with any of the proceedings before the corporation commission; (5) the notes and mortgages were in due form and valid and binding; the plaintiff was entitled to a decree for the full amount of the indebtedness against Burnley and the Kiowa Ice, Light & Water Company and also to foreclose the lien of the mortgages; (6) the plaintiff was entitled to a decree for an attorney's fee as prayed in the petition; (7) the town of Kiowa is estopped to deny the relief for which plaintiff prays, and is estopped to deny the validity of its own contract and its own ordinances; (8) the corporation commission had not power to impair the obligation of the contracts in said notes and mortgages; (9) and finally the said corporation commission could not deprive the plaintiff of its property without due process of law, in violation of section 1 of the Fourteenth Amendment to the Constitution of the United States." At page 39 the first proposition relied on for a reversal is thus stated: "The incorporated town of Kiowa had the power and right to make the contract with Milo T. Crane and E. G. Burnley, and also the power to convey the water and light plant to the Kiowa Ice, Light & Water Company." Manifestly, the second statement in this proposition is the keystone in the arch of plaintiff's argument. The correctness of the first statement does not include or estab "In my opinion, the statutes of this state do not authorize a municipality to sell a waterworks system. I think that a municipality can sell property that has not been dedicated to public use, although it may have been purchased for the purpose of using it in a waterworks system, or property that has been abandoned for public use." Concerning this plaintiff says: judge on this question caused him to fall into "An erroneous opinion by the learned trial reversible error on the entire case." In reaching a correct conclusion on the question here presented, certain constitutional and statutory provisions are to be considered, and in their consideration their previous interpretation and application by this court should be adhered to where possible and apposite. Plaintiff relies on section 6, art. 18, Const., as authorizing a municipal corporation to exercise the same rights and powers, and as imposing on it the same legal and moral duties, as those pertaining to an individual. (Brief, p. 44.) That section reads: "Every municipal corporation within this state shall have the right to engage in any business or enterprise which may be engaged in by a person, firm, or corporation by virtue of a franchise from said corporation." Article 18 comprehends the entire constitutional scheme for the delegation of powers to and the limitation of authority of municipal corporations, and is readily susceptible of four subdivisions. Section 6 is a part of the fourth subdivision and must be considered in connection with its correlated sections. These relate to the granting, extension, and renewal of franchises, limit their duration to 25 years, and prohibit the granting of exclusive franchises. When considered in connection with its context, it is evident that this section does not justify the broad inter (230 P.) authorizes municipal corporations to do those things which they might by franchise authorize persons, firms, and corporations to do. No one would seriously contend that a franchise might be granted for the business of selling public utilities, as that term is used in section 27, art. 10, Const. That section 6 is a grant of power to municipalities in furtherance of the public policy of the state is the effect of the holding of this court in Oklahoma City v. Oklahoma Ry Co., 20 Okl. 1, 93 P. 48, 16 L. R. A. (N. S.) 651. [1, 2] Therefore, since section 6, art. 18, Const., is a grant of power to municipalities in furtherance of public policy, and since the impairment or destruction of public service, or the diversion of public funds to purposes other than those for which they are voted, are clearly obnoxious to the public policy of the state, authority of the incorporated town of Kiowa to sell its water and light plant must be found, if it exists, in the language of some express statute. It is well settled that municipal corporations possess only such powers as are expressly granted. O'Neil Engineering Co. v. Incorporated Town of Ryan, 32 Okl. 738, 124 P. 19; In re Town of Afton, 43 Okl. 720, 144 P. 184, L. R. A. 1915D, 978; Town of New Butler v. Tucker, 54 Okl. 182, 153 P. 628; City of Enid v. Warner-Quinlan Asphalt Co., 62 Okl. 139, 161 Pa. 1092. In Dillon on Municipal Corporations (4th Ed.) vol. 1, p. 145, the rule followed in the above cases is thus stated: "It is a general and undisputed proposition of law that a municipal corporation possesses and can exercise the following powers and no others: First, those granted in express words; second, those necessarily or fairly implied in or incident to the powers expressly granted; third, those essential to the declared objects and purposes of the corporation, not simply convenient, but indispensable. * Neither the corporation nor its officers can do any act, or make any contract, or incur any liability, not authorized thereby or some legislative act applicable thereto. All acts beyond the scope of the powers granted are void." Reliance is placed on the second subdivision of section 4762, Comp. Stat. 1921, which reads: ferent from its title to and power of disposition of property acquired for and actually dedicated to the public use of its inhabitants. As to the former class the power of the corporation to dispose of it is unquestioned. The rule is different as to the latter class. It is only when the public use has been abandoned, or the property has become unsuitable or inadequate for the purpose to which it was dedicated, that a power of disposition is recognized in the corporation. 19 R. C. L. p. 172, par 78; Tiedeman on Mun. Corp § 208; 28 Cyc. p. 623 par. 3; 2 Dillon on Mun. Corp § 575. And the granting of a franchise or the making of a contract for the exercise of the public functions to which the property was originally dedicated is not an abandonment. Tonkawa Milling Co. v. Town of Tonkawa, 15 Okl. 672, 83 P. 915; Moomaw v. Sions, 96 Okl. 202, 220 P 865. That subdivision 2 of section 4762, supra, has reference to the first class of property above mentioned seems clear from the language of the limiting phrase, "for the use of the corporation." That this section of the statute, if given the construction contended for by plaintiff, would be in conflict with section 27, art. 10, Const., seems too clear for argument. This constitutional provision, so far as material here, reads. "Any incorporated city or town in this state may, by a majority of the qualified property tax paying voters of such city or town, voting at an election to be held for that purpose, be allowed to become indebted in a larger amount than that specified in section twenty-six, for the purpose of purchasing or constructing public utilities, or for repairing the same, to be owned exclusively by such city." ties made by the people at any election held The grant of power to municipal authoripursuant to this provision is expressly limited by the provision itself to public utilities "to be owned exclusively by such city." If municipal authorities are thus expressly prohibited from selling an interest in such public utility, even for the purpose of effectuating competent management and control, it must follow indubitably that the larger power of complete disposition is not to be implied. And the reason for this is obvious. It would open a door for the exploitation of the public through collusive sales of municipally owned public utilities. Not that this result would follow in any particular case, but that it might do so, is sufficient reason for the public policy which forbids it. The incorporated town of Kiowa acquired its [3] There is a clear distinction, recognized water and light plant through a bond issue by practically all authorities, between prop-in conformity with the provisions of section erty purchased and held by municipal corpo- | 27, supra. It is therefore concluded that no rations for the use of the corporation as an entity, and that purchased and held by such corporation for the public use and benefit of its citizens. In other words, its title to and power of disposition of property acquired for strictly corporate uses and purposes are dif230 P.-57 "The board of trustees shall have the following powers, viz.: *** Second. To purchase, hold or convey any estate, real or personal, for the use of the corporation, so far as such purchase may be necessary to carry out the objects contemplated by this chapter." express or implied power has been vested in municipal authorities in this state to sell or otherwise dispose of a municipal water and light plant, acquired under section 27, art. 10, Const., unless the same has been abandoned as a public utility or has become in adequate and is not adapted to the public us- street improvements against property benees for which it was originally intended. fited thereby. [4, 5] Plaintiff cites a great number of cases from other states which it contends support its position contrary to the conclusion here reached. These cases are too numerous to review individually but they have been examined carefully Some of them do not, in the judgment of this court, justify the meaning imputed to them. Others fail to differentiate the two classes of public property over which municipal authorities exercise control, as above pointed out herein. A few are based upon express statutes of those jurisdictions. Thus in McDonald v Price et al., 45 Utah, 464, 146 P. 550, the first paragraph of the syllabus, relied on by plaintiff, reads: "Though property such as streets, alleys, etc., held for strictly corporate purposes may not be sold, a lighting plant owned by a city is held in a proprietary right and may be sold." This leads to a consideration of a second phase of this transaction as presented by the record which is comprehended by the proposition now under consideration. Certain matters connected with the sale of this plant were submitted to the qualified voters of Kiowa under the referendum provisions of article 18, Const. In reference to this feature of the case plaintiff states, at page 43 of its brief, as follows. "The incorporated town and the Kiowa Ice, Light & Water Company complied with sections 5a and 5b of article 18 of the Constitution of Oklahoma. It is undisputed that the matter of granting a franchise, which included the sale of the property, was submitted to a vote of the electors of the incorporated town, and was carried by a majority of about 100, only 11 of the franchise." votes being against the sale and the granting Sections 5(a) and 5(b) are as follows: An examination of this case discloses that "Sec. 5. (a) Vote by People-Election. No there is an express statute in Utah authoriz- municipal corporation shall ever grant, extend, ing a sale of municipally owned public util- or renew a franchise, without the approval of a ities for not less than the amount of outstand- majority of the qualified electors residing withing bonds issued for their contruction So in its corporate limits, who shall vote thereon it is concluded that in the disposition of the at a general or special election; and the legislative body of any such corporation may subinstant case only our own constitutional and mit any such matter for approval or disapprov statutory provisions and the applicable deci- al to such electors at any general municipal sions of this court should be looked to for election, or call a special election for such guidance, aided by the application of well-purpose at any time upon thirty days' notice; settled general rules. and no franchise shall be granted, extended, or renewed for a longer term than twenty-five years. [6] The conclusion here reached as to want of power of municipal authorities in this state to sell adequate and suitable public "Sec. 5. (b) Petition for Election. Whenutilities, dedicated to the use of the inhabi-ever a petition signed by a number of qualified electors of any municipal corporation equal to tants, who have burdened themselves with twenty-five per centum of the total number taxation for a long number of years in order of votes cast at the next preceding general to create a fund for their construction, is not municipal election, demanding that the frandeemed to be in conflict with any decision of chise be granted, extended, or renewed, shall be this court cited or quoted from in plaintiff's filed with the chief executive officer of said brief. However, those cases will be briefly corporation, the chief executive officer shall, within ten days thereafter, call a special election, at which he shall submit the question of whether or not such franchise shall be granted, extended, or renewed, and if, at said election, a majority of the said electors voting thereon shall vote for the grant, extension, or renewal of such franchise, the same shall be granted by the proper authorities at the next succeeding regular meeting of the legislative body of the city." reviewed. In Owen v. City of Tulsa, 27 Okl. 264, 111 P. 320, and in Sharp v City of Guthrie, 49 Okl. 213, 152 P. 403, the decisions were based upon charter provisions of those cities which authorized the sale of unused and unimproved portions of public parks. In Fretz City of Edmond, 66 Okl. 262, 168 P. 800, L. R. A. 1918C, 405, and in City of Oklahoma City v. Hoke, 75 Okl. 211, 182 P. 692, it was decided that in the operation of municipal water systems the city authorities act in a business and administrative rather than in a governmental capacity In Atlas Life Ins. Co. v Board of Education, 83 Okl. 12, 200 P. 171, the property involved had been abandoned as unsuitable for school purposes long before the action complained of was taken. Nitsche v. State Security Bank of Zanesville, 69 Okl. 37, 170 P. 234, involved the as The ordinance which was submitted to the people, and which was adopted at the elec tion held March 11, 1918, is known as "Ordinance No. 103." The title of this ordinance is in this language: "An ordinance granting to the Kiowa Waterworks, Light & Power Company, its successors and assigns, the right to construct, maintain and operate a system of works for the conveyance of water and electricity to all parts of the incorporated town of Kiowa, Oklahoma, to furnish water, light, heat and power to said |