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(230 P.) authorizes municipal corporations to do those , ferent from its title to and power of dispothings which they might by franchise au sition of property acquired for and actually thorize persons, firms, and corporations to dedicated to the public use of its inhabitants. do. No one would seriously contend that a As to the former class the power of the corfranchise might be granted for the business poration to dispose of it is unquestioned. of selling public utilities, as that term is The rule is different as to the latter class. It used in section 27, art. 10, Const. That sec- is only when the public use has been abantion 6 is a grant of power to municipalities doned, or the property has become unsuitable in furtherance of the public policy of the or inadequate for the purpose to which it was state is the effect of the holding of this court dedicated, that a power of disposition is recin Oklahoma City v. Oklahoma Ry Co., 20 ognized in the corporation. 19 R. C. I. p. Okl. 1, 93 P. 48, 16 L. R. A. (N. S.) 651. 172, par 78; Tiedeman on Mun. Corp $ 208;

[1, 2] Therefore, since section 6, art. 18, 28 Cyc. p. 623 par. 3; 2 Dillon on Mun. Const., is a grant of power to municipalities Corp $ 575. And the granting of a franchise in furtherance of public policy, and since the or the making of a contract for the exercise impairment or destruction of public service, of the public functions to which the property or the diversion of public funds to purposes was originally dedicated is not an abandonother than those for which they are voted, are ment. Tonkawa Milling Co. v. Town of clearly obnoxious to the public policy of the Tonkawa, 15 Okl. 672, 83 P. 915; Moomaw v. state, authority of the incorporated town of Sions, 96 Okl. 202, 220 P 865. That subdiKiowa to sell its water and light plant must vision 2 of section 4762, supra, has reference be found, if it exists, in the language of to the first class of property above mentioned some express statute. It is well settled that seems clear from the language of the limiting municipal corporations possess only such phrase, "for the use of the corporation.” powers as are expressly granted. O'Neil En. That this section of the statute, if given the gineering Co. v. Incorporated Town of Ry- construction contended for by plaintiff, would an, 32 Okl. 738, 124 P. 19; In re Town of be in conflict with section 27, art. 10, Const., Afton, 43 Okl. 720, 144 P. 184, L. R. A. 1915D, seems too clear for argument. This consti978; Town of New Butler v. Tucker, 54 Okl. tutional provision, so far as material here, 182, 153 P. 628; City of Enid v. Warner-Quin- reads: lan Asphalt Co., 62 Okl. 139, 161 Pa. 1092.

"Any incorporated city or town in this state In Dillon on Municipal Corporations (4th may, by a majority of the qualified property Ed.) vol. 1, p. 145, the rule followed in the tax paying voters of such city or town, voting above cases is thus stated:

at an election to be held for that purpose, be

allowed to become indebted in a larger amount "It is a general and undisputed proposition than that specified in section twenty-six, for of law that a municipal corporation possesses the purpose of purchasing or constructing and can exercise the following powers and no public utilities, or for repairing the same, to be others: First, those granted in express words; owned exclusively by such city." second, those necessarily or fairly implied in or incident to the powers expressly granted; third, those essential to the declared objects ties made by the people at any election held

The grant of power to municipal authoriand purposes of the corporation, not simply convenient, but indispensable. * Neither pursuant to this provision is expressly limthe corporation nor its officers can do any act, ited by the provision itself to public utilities or make any contract, or incur any liability, to be owned exclusively by such city.” If pot authorized thereby or some legislative act municipal authorities are thus expressly proapplicable thereto. All acts beyond the scope hibited from selling an interest in such pubof the powers granted are void."

lic utility, even for the purpose of effectuat

ing competent management and control, it Reliance is placed on the second subdivi- must follow indubitably that the larger powsion of section 4762, Comp. Stat. 1921, which er of complete disposition is not to be imreads:

plied. And the reason for this is obvious. “The board of trustees shall have the follow. It would open a door for the exploitation of ing powers, viz.: * * * Second. To purchase, the public through collusive sales of municihold or convey any estate, real or personal, pally owned public utilities. Not that this for the use of the corporation, so far as such result would follow in any particular case, purchase may be necessary to carry out the but that it might do so, is sufficient reason objects contemplated by this chapter.”

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 express or implied power has been vested in entity, and that purchased and held by such municipal authorities in this state to sell or corporation for the public use and benefit of otherwise dispose of a municipal water and its citizens. In other words, its title to and light plant, acquired under section 27, art. power of disposition of property acquired for 10, Const., unless the same has been abanstrictly corporate uses and purposes are dif- doned as a public utility or has become in

230 P.-57

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adequate and is not adapted to the public us- , street improvements against property benees for which it was originally intended. tited thereby.

[4, 5] Plaintiff cites a great number of cas This leads to a consideration of a second es from other states which it contends sup- phase of this transaction as presented by the port its position contrary to the conclusion record which is comprehended by the prophere reached. These cases are too numer-osition now under consideration. Certain ous to review individually but they have matters connected with the sale of this plant been examined carefully Some of them do were submitted to the qualified voters of Kionot, in the judgment of this court, justify the wa under the referendum provisions of armeaning ímputed to them. Others fail to ticle 18, Const. In reference to this feature differentiate the two classes of public prop- of the case plaintiff states, at page 43 of its erty over which municipal authorities exer- brief, as follows. cise control, as above pointed out herein. A

"The incorporated town and the Kiowa Ice, few are based upon express statutes of those Light & Water Company complied with secjurisdictions. Thus in McDonald v Price et tions 5a and 5b of article 18 of the Constitution al., 45 Utah, 464, 146 P. 550, the first para- of Oklahoma. It is undisputed that the matter graph of the syllabus, relied on by plain- of granting a franchise, which included the tiff, reads:

sale of the property, was submitted to a vote of “Though property such as streets, alleys, carried by a majority of about 100, only 11

the electors of the incorporated town, and was etc., held for strictly corporate purposes may not be sold, a lighting plant owned by a city of the franchise."

votes being against the sale and the granting is held in a proprietary right and may be sold."

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 islative body of any such corporation may sub

at a general or special election; and the leginstant 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' potice; settled general rules.

and no franchise shall be granted, extended, or [6] The conclusion bere reached as to want renewed for a longer term than twenty-five of power of municipal authorities in this years. 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 tants, who have burdened themselves with twenty-five per centum of the total number

electors of any municipal corporation equal to 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 briefiy corporation, the chief executive officer shall, reviewed.

within ten days thereafter, call a special elecIn Owen v. City of Tulsa, 27 Okl. 264, 111 tion, at which he shall submit the question of P. 320, and in Sharp v City of Guthrie, 49 whether or not such franchise shall be granted, Okl. 213, 152 P. 403, the decisions were based extended, or renewed, and if, at said election,

a majority of the said electors voting thereon upon charter provisions of those cities which shall vote for the grant, extension, or renewal authorized the sale of unused and unim- of such franchise, the same shall be granted by proved portions of public parks,

the proper authorities at the next succeeding In Fretz Ý City of Edmond, 66 Okl. 262, regular meeting of the legislative body of the 168 P. 800, L. R. A. 1918C, 405, and in City of city.” Oklahoma City v. Hoke, 75 Okl. 211, 182 P.

The ordinance which was submitted to the 692, it was decided that in the operation of people, and which was adopted at the elec municipal water systems the city authorities tion held March 11, 1918, is known as "Ordiact in a business and administrative rather nance No. 103." The title of this ordinance than in a governmental capacity

is in this language: In Atlas Life Ins. Co. v Board of Education, 83 Okl. 12, 200 P. 171, the property in “An ordinance granting to the Kiowa Watervolved had been abandoned as unsuitable for works, Light & Power Company, its succes

sors and assigns, the right to construct, mainschool purposes long before the action com

tain and operate a system of works for the plained of was taken.

conveyance of water and electricity to all parts Nitsche v. State Security Bank of Zanes- of the incorporated town of Kiowa, Oklahoma, ville, 69 Okl. 37, 170 P. 234, involved the as- to furnish water, light, heat and power to said signability and enforcement of liens for town and its inhabitants."

(230 P.) Following this title, and preceding the "Where the language of an ordinance grantenacting clause, is this preamble:

ing to a waterworks company a franchise is

ambiguous and reasonably susceptible of two "Whereas, Milo T. Crane has offered to pur- constructions, the construction that is more chase for the purpose of operating the same favorable to the public should be adopted.” the waterworks and electric light system owned by the incorporated town of Kiowa, Oklahoma,

Neither the preamble nor any provision of and as a condition thereto provides that an ordinance be passed granting a franchise to the the ordinance informed the voters as to the Kiowa Waterworks, Light & Power Company, price which the town should receive for its its successors and assigns, and,

water and light plant. This plant cost the "Whereas, it is necessary to as quickly as town of Kiowa $57,000; of which $19,000 possible procure a supply of water and electric was proceeds of a bond issue, and the Kiowa lights for said incorporated town and its in- Waterworks, Light & Power Company paid habitants, and to that end, it is the desire of for it $2,500 in cash and $2,500 in light and the Kiowa Waterworks, Light & Power Com- water service to the town. pany that a franchise be granted to it for the

The deed and bill of sale relied on are in purpose of enabling it to supply said incorporated town of Kiowa, Oklahoma, and its in- identical language except as to the kind and habitants with water and electric lights."

character of property conveyed. Both instru

ments recite as preamble the proceedings [7] The ordinance then grants a franchise leading up to their execution, including an

election held December 31, 1917, resolutions in the usual terms for a period of 20 years of the board, and the referendum on and to the Kiowa Waterworks, Light & Power

Section 1 Company, “to erect, maintain, extend and adoption of Ordinance No. 103.

of each instrument reads: operate a system of waterworks, water mains and pipes, meters, fire plugs, poles, "Whereas, heretofore, to wit, on the 3d wires and all necessary apparatus and ap day of December, 1917, the board of trustees purtenances within the corporate limits of of the incorporated town of Kiowa, Oklahoma, said town as now existing, or may be here were authorized to sell its waterworks system after extended, for the purpose of supplying and electric light plant and to grant to the water, generating electricity and distribut- equities of said town in the operation and use

purchasers all of the rights, titles, interest and ing the same to said town and public general of the plants that the town might have, so ly, and for said purpose to enter upon or be- far as it could be legally done, and to grant to low and use streets, alleys, avenues, lanes, such purchasers such franchise as might be boulevards, sidewalks, and public areas or legal and proper." grounds of the town or under control or jurisdiction thereof, and erect, maintain, It thus appears that when the matter was extend and operate such water mains and first submitted to the people on December 3, water pipes and meters and fire plugs, wires, 1917, they by their votes authorized the board cables and all necessary apparatus and ap. of trustees to sell all of the rights, titles, purtenances, subject to the terms and condi- interest, and equities of the town “in the op tions hereinafter provided.”

eration and use of the plants Section 11 authorizes the assignment of the far as it could be legally done." Thereafter franchise upon the express condition that the on March 11, 1918, the people by referendum assignee accepts all of the terms and condi- | adopted Ordinance No. 103, being informed tions of the ordinance. Section 12 requires by the preamble thereof that “Milo T. Crane the written acceptance of the ordinance by has offered to purchase for the purpose of the Kiowa Waterworks, Light & Power Com-operating the same the waterworks and elecpany within five days. It is admitted that tric light system" upon condition “that an this written acceptance was filed with the ordinance be passed granting a franchise to town clerk.

the Kiowa Waterworks, Light & Power ComIt is upon the terms of this ordinance and pany, its successors and assigns.” The deed its preamble, aside from general statutes that and bill of sale were duly placed of record in the plaintiff relies to support the validity of Pittsburg county, the deed and bill of sale thereafter executed In determining the extent of the power by the municipal authorities conveying all granted by the people in these referendum real and personal property which apper. elections, it is necessary to consider the extained to the municipally owned water and tent and compass of the propositions to light plant to the Kiowa Waterworks, Light which they were asked to give their assent. & Power Company. Since it has been de- It is too clear for argument that at both termined that no express or implied stat. elections the people were asked to give their utory power existed authorizing this sale, assent to a conveyance of the water and the conveyances in question must be consid- light plant “for purpose of operating the ered in their relation to Ordinance No. 103. same," and the purpose of operating it was In Mitchell v. Tulsa Water, Light, Heat & unquestionably understood to mean the furPower Co., 21 Okl. 243, 95 P. 961, the first nishing of public service as originally conparagraph of the syllabus reads:

templated by the bond issue for its construc

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tion. The deed, the bill of sale, and Ordi- , formity with the views herein expressed. In
nance No. 103 constitute one entire contract all other respects the decree of the trial court
authorized by the people to be entered into should be affirmed.
by the board of trustees with the Kiowa Wa-
terworks, Light & Power Company. There-
fore, the title which the company acquired to
the property was such title only as the FREEMAN et al. v. W. T. RAWLEIGH CO.
board of trustees was authorized by the

(No. 14887.)
voters to convey. It could not be conveyed
free of the use for which it was constructed (Supreme Court of Oklahoma. Nov. 18, 1924.)
and to which it was adapted, and to which
use it had been dedicated. It could not be

(Syllabus by the Court.) conveyed so as to defeat the right of re Contracts em 248Direction of verdict for purchase by the town as authorized by Comp. plaintiff, where evidence wholly fails to supStat. 1921, § 4767. All proceedings connected port sole defense, not erroneous. with this transaction are matters of public Where the only defense offered to an ob. record and are notice to the world of the ligation incurred by reason of a written con

said conlimitations of the conveyance (Comp. Stat. ) tract is a change or alteration 1921, § 4797), and of the public use with tract, and the evidence wholly fails to show which the title is burdened. Public policy the court to direct a verdict for the plaintiff,

any change or alteration, it is not error for forbids that a public utility such as this in accord with the prayer of the petition. shall be impaired or destroyed willfully; or that private rights shall be acquired therein the enforcement of which will have this re

Commissioners' Opinion, Division No. 3. sult.

Appeal' from District Court, Murray Coun. It is therefore concluded that the munic-ty; W. L. Eagleton, Judge. ipal authorities of the incorporated town of Action by the W. T. Rawleigh Company Kiowa had no constitutional or statutory against G. L. Freeman and others. From a authority, either express or implied, to sell judgment for plaintiff, defendants appeal. unconditionally the municipally owned wa- Aflirmed. ter and light plant. It is further concluded

H, W. Broadbent and John A. Haste, both that by virtue of the referendum elections of Sulphur, for plaintiffs in error. they were authorized to enter into the con

H. W. Fielding, of Sulphur, for defendant tract which was made with the Kiowa Wa

in error, terworks, Light & Power Company, but that such contract did not authorize that company to mortgage or otherwise convey the

JONES, C. This action was instituted in property except as provided in section 11 of the district court of Murray county; Okl., by Ordinance No. 103, which limitation was ac

the defendant in error, as plaintiff, against cepted in writing by the company, and is the plantiffs in error, as defendants in the binding on it and on all persons claiming trial court. The record discloses that on or under it. This acceptance is explicitly re- about the 23d day of September, 1913, the cited in the face of the deed and of the bill appellant G. L. Freeman entered into a writof sale on which plaintiff relies.

ten contract with the defendant in error, W. This conclusion renders unnecessary a con- T. Rawleigh Company, to purchase at wholesideration and discussion of the other prop

sale prices certain proprietary articles, medositions urged by plaintiff in its brief.

icines, extracts, etc., for the purpose of reThe judgment of the trial court should selling same to customers, and, also purhave been in favor of plaintiff for foreclosure chased a wagon to be used in the distribuof its mortgage and for a sale of the prop- tion of his wares. The contract sued on is erty upon condition that the purchaser take one of the ordinary contracts used by comthe property burdened with the condition panies, such as Rawleigh Company, in dealthat it be operated as a public utility as ing with their customers or employees who originally contemplated in the hond issue sell their wares and merchandise direct to for its construction. That portion of the the consumers, and among other things projudgment requiring the incorporated town of vided that the said G. L. Freeman should Kiowa to pay the Kiowa Waterworks, Light make weekly payments of the goods pur& Power Company the sum of $2,500 within chased. six months should be vacated.

The other appellants, Vale, Bates, and T. For the reasons herein stated, this cause C. Freeman, signed a bond or obligation with should be remanded to the trial court, with the said G. L. Freeman to the appellee, Rawdirections to correct and amend its decree leigh Company, wherein they become guar. in the two particulars pointed out in the last antors for the said G. L. Freeman, for the preceding paragraph, and for such further payment of all indebtedness incurred under proceedings as may be necessary for carry. ihe terms of the contract heretofore reing into effect such amended decree in con- ferred to.

For other cases see same topic and KEY-NUMBER in all Key-Numbered Digests and Indexes

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(230 P.) The defense offered by these guarantors - which expresses a principle with which is that the contract was changed without we fully agree, but has no application to their knowledge and consent, and in their an- | the facts in this case. In the Harrington swer aver that after the contract had been case the county in which the goods should executed whereby they became obligated as be sold was set forth in the contract, and sureties for the appellant G. L. Freeman afterwards changed without the consent of that an agent of the Rawleigh Company de- the guarantor, but in this contract no counlivered to the appellant G. L. Freeman a cer- ty is named, the selection of some territory tain document, which is styled “Rules and or county in which to operate was a necesinstructions about reporting," wherein it sary incident to the fulfillment of the conwas stated that the company required the tract, and, no mention of this fact being said G. L. Freeman to remit to the company made in the contract, the presumption would at least one-half of his cash receipts until be that the guarantors were willing for him his account was paid and various other sug- to select whatever territory he wanted. This gestions and directions concerning the man seems to be the judgment of this court in the rer or mode of conducting the business by Harrington Case, as indicated on page 203, the said G. L. Freeman, but this instrument | 83 Okl. (201 P 498). The fact, as we view it, was not signed by any one, and in our judge is simply a case of failure to pay, which is ment in no wise affects the contract entered not denied or seriously controverted, and into. The appellant also complained that involves a principle of law so elementary after the execution of the contract the said and primary that we deem it unnecessary to G. L. Freeman selected Murray county, Okl.; cite authorities in support of same, and therein other words, Murray county was set apart fore recommend that the case be affirmed. to him as his territory, in which to sell his wares and merchandise, which they aver is a material change of the original contract, and from an examination of same we find

ROURKE V. GERLACH-BARKLOW CO. that there is no mention made of any par

(No. 13840.) ticular territory in which the said G. L. (Supreme Court of Oklahoma. Nov. 25, 1924.) Freeman should operate, and, so far as the record discloses, there were no objections

!Syllabus by the Court.) made by Freeman to making the sale in Appeal and error Om766-Appeal dismissed for Murray county, and the other appellants, failure of plaintiff in error's brief to set forth guarantors for the said G. L. Freeman, nei

specifications of error, argument, and authori.

ties, ther allege nor offer any proof showing that

Where plaintiff in error fails to set forth in their rights in any particular were prejudiced by reason of the said G. L. Freeman his brief the specifications of error complained

of, the argument and authorities in support being assigned to Murray county.

thereof as required by rule 26 of this court (165 On the trial of the case a jury was im- P. ix), but merely states that the judgment paneled, and at the close of the evidence is not supported by law or evidence, there is the court instructed the jury that the proof nothing presented for this court to review, and failed to show that there had been any the appeal will be dismissed. change in the contract, and that the defendants, appellants in this court, were liable,

Commissioners' Opinion, Division No. 2. and instructed them to return a verdict in

Appeal from District Court, Oklahoma favor of the plaintiff, Rawleigh Company, County, Edward Dewes Oldfield, Judge. from which order and judgment of the court, Action by the Gerlach-Barklow Company the appellant prosecutes this appeal, and sets against S. A. Rourke, doing business as forth various specifications of error and cites Southwest Transfer & Storage Company. numerous authorities in support of their con- Judgment for plaintiff and defendant appeals. tention based upon the theory of a change or Appeal dismissed. alteration of the written contract (citing the

Gasper Edwards, of Oklahoma City, for case of Halsell v. Renfrow, 14 Okl. 674, 78

plaintiff in error P. 118, 2 Ann. Cas. 286, and other similar

Pierce, McClelland & Kneeland, of Oklacases, which in our judgment are not ap- homa City, for defendant in error. plicable to the facts in this case), and further ailege that the guarantors are exonerated

JARMAN, C. The brief filed by plaintiff by reason of the change or alteration as in error contains the following statement: alleged, and cites the case of K, K. K. Med. Co. v. Harrington, 83 Okl. 201, 201 P. 496, in

"The judgment is not supported by law or eviwhich the court stated:

dence." "Where the creditor changes or alters the

There is no specification of error of which original obligation of the principal without the complaint is made, set out in the brief of the consent of the guarantor, such act on the part plaintiff in error, other than that the judg. of the creditor exonerates the guarantor," ment is not supported by law or evidence.

m For other cases see same topic and KEY-NUMBER in all Key-Numbered Digests and Indexes

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