Opinion
3 Div. 806.
March 6, 1958. Rehearing Denied June 12, 1958.
Appeal from the Circuit Court, Montgomery County, Eugene W. Carter, J.
Knabe Nachman and Jones, Murray Stewart, Montgomery, for appellants.
Validation of the bonds proposed to be issued by the Board, including all charges prescribed by the Board for use of the sanitary sewer system and all covenants contained in the bond indenture, prevent appellee's calling into question the applicability of those charges to him in any court in Alabama. Williams v. Water Works and Sanitary Sewer Board, 261 Ala. 460, 74 So.2d 814; Oliver v. Water Works and Sanitary Sewer Board, 261 Ala. 234, 73 So.2d 552; Water Works and Sanitary Sewer Board v. Dean, 260 Ala. 221, 69 So.2d 704; Water Works and Sanitary Sewer Board v. Sullivan, 260 Ala. 614, 69 So.2d 709; Act No. 859, Gen.Acts of 1953, p. 1148. The deed from the City to Thomas does not relate to charges for the use of the sanitary sewer system. Y. M. C. A. v. State, 265 Ala. 640, 93 So.2d 781; Home Ins. Co. v. Pettit, 225 Ala. 487, 143 So. 839; Hochfeld v. Portland, 72 Or. 190, 142 P. 824; Delaware, L. W. R. Co. v. Orange, 106 N.J.L. 564, 146 A. 913; Louisville Jefferson Co. Met. Sewer District v. St. Matthews Sanitary Ass'n, 307 Ky. 348, 208 S.W.2d 490; 14 McQuillin Municipal Corporations, 3rd Ed., § 38.86; Authorities, supra. Appellee derives no benefits or rights from the Boylston agreement. MacMahon v. Baumhauer, 234 Ala. 482, 175 So. 299; Williamson v. Lee Optical Co., 348 U.S. 483, 75 S.Ct. 461, 99 L.Ed. 563; Hamilton v. Adkins, 250 Ala. 557, 35 So.2d 183. Appellee did not succeed to the rights of the Thomases. Gilmer v. Mobile etc. R. Co., 79 Ala. 569; Water Works and Sanitary Sewer Board v. Sullivan, supra; Oliver v. Water Works Sewer Board, supra; Empire Natural Gas Co. v. Thorp, 121 Kan. 116, 245 P. 1058; Alderson v. Empire Natural Gas Co., 116 Kan. 501, 227 P. 347, 41 A.L.R. 253; Fort Smith Gas Co. v. Gean, 186 Ark. 573, 55 S.W.2d 63; Field v. Morris, 88 Ark. 148, 114 S.W. 206; Panhandle etc. Ry. Co. v. Wiggins, Tex.Civ.App., 161 S.W.2d 501; 2 American Law of Property, Sec. 9.13, pp. 377 et seq. The City has no power to exempt property owners from service charges for the use of the sanitary sewer system. Oliver v. Water Works Sewer Board, supra; General Electric Co. v. Fort Deposit, 174 Ala. 179, 56 So. 802; Pearson v. Duncan Son, 198 Ala. 25, 73 So. 406, 3 A.L.R. 242; MacMahon v. Baumhauer, supra; Carson v. Sewer Com'rs, 182 U.S. 398, 21 S.Ct. 860, 45 L.Ed. 1151; Leggett v. Detroit, 137 Mich. 247, 100 N.W. 566; Pittsburgh, C. C. St. L. Railway Co. v. Oglesby, 165 Ind. 542, 76 N.E. 165; Chesapeake O. R. Co. v. Morhead, 223 Ky. 698, 4 S.W.2d 726; George Williams College v. Williams Bay, 242 Wis. 311, 7 N.W.2d 891; Cleveland v. Edwards, 109 Ohio St. 598, 143 N.E. 181, 37 A.L.R. 1352. A city may deal with property dedicated for street purposes in any legitimate public way which does not impair the right of ingress and egress to and from adjoining property. Brock v. Anniston, 244 Ala. 544, 14 So.2d 519.
Godbold, Hobbs Copeland, Montgomery, for appellee.
Appellee's contract rights cannot be extinguished by a bond validation proceeding in which appellee did not appear and in which his rights were not presented or considered. MacMahon v. Baumbauer, 234 Ala. 482, 175 So. 299; Mobile v. Board of Water Sewer Commissioners, 258 Ala. 669, 64 So.2d 824; Water Works and Sanitary Sewer Board v. Sullivan, 260 Ala. 214, 69 So.2d 709; Williams v. Water Works, etc., Board, 261 Ala. 460, 74 So.2d 814; Code 1940, Tit. 7, § 170; Act No. 859, Gen.Act, 1953, p. 1148. The covenant in the deed exempts the owners of the described lands from the present sewer service charge. Water Works and Sanitary Sewer Board v. Campbell, 262 Ala. 508, 80 So.2d 250, 252; MacMahon v. Baumhauer, supra; Y. M. C. A. v. State, 265 Ala. 640, 93 So.2d 781, 785. Appellants are attempting to discriminate unfairly in honoring the Boylston agreement and ignoring the Thomas agreement. The right of free use extends to the successors in title to the original parties. Gilmer v. Mobile etc. R. Co., 79 Ala. 569; MacMahon v. Williams, 79 Ala. 288; Weil v. Hill, 193 Ala. 407, 69 So. 438; White v. Harrison, 202 Ala. 623, 81 So. 565; Virgin v. Garrett, 233 Ala. 34, 169 So. 711; MacMahon v. Baumhauer, supra; Water Works and Sanitary Sewer Board v. Sullivan, supra; Empire Natural Gas Co. v. Thorp, 121 Kan. 116, 245 P. 1058; Thayer Foss Co. v. Woburn, 269 Mass. 186, 168 N.E. 734; Oliver v. Water Works and Sanitary Sewer Board, 261 Ala. 234, 73 So.2d 552; 2 American Law of Property, 410, § 9.26; 5 Restatement Law of Property, 2914, § 453. The agreements contained in the Thomas deed are within the City's authority. MacMahon v. Baumhauer, supra; Water Works and Sanitary Sewer Board v. Dean, 260 Ala. 221, 69 So.2d 704; Oliver v. Water Works and Sanitary Sewer Board, 261 Ala. 234, 73 So.2d 552; Coit v. Grand Rapids, 115 Mich. 493, 73 N.W. 811; Leggett v. Detroit, 137 Mich. 247, 100 N.W. 566; Giles v. Olympia, 115 Wn. 428, 197 P. 631, 16 A.L.R. 493; Perth Amboy Trust Co. v. Board of Alderman, 75 N.J.L. 291, 68 A. 84; New Brunswick v. Borough of Milltown, 3 N.J. Super. 113, 65 A.2d 621, 623; Cleveland v. Edwards, 109 Ohio St. 598, 143 N.E. 181, 37 A.L.R. 1352; Cleveland v. Cuyahoga Heights, 81 Ohio App. 191, 75 N.E.2d 99; Code, Tit. 37, §§ 507, 601. Appellee's right of free use is not destroyed by the subsequent inclusion of the sewer right of way in a platted street. Brock v. Anniston, 244 Ala. 544, 14 So.2d 519.
Pertinent Parts of the Contract Between
Jett Thomas and City of Montgomery
"Whereas, the said Jett M. Thomas is the owner of a certain tract of one hundred fifteen acres of land as hereinafter more particularly described, which said property is not contiguous to the right-of-way hereinafter granted but which is in proximity thereto and a portion of which may be served by said sanitary sewer main, for which said right-of-way is granted; and
"Whereas, the said City of Montgomery, Alabama has agreed that in consideration of the execution of this conveyance by the said Jett M. Thomas of said right-of-way as hereinafter described, that no charge will be made for the use of said sewer by said tract of one hundred fifteen acres hereinafter described, to-wit: * * *
"Whereas, the said City of Montgomery, Alabama has agreed with the said Jett M. Thomas that in consideration of the execution of said conveyance to said right-of-way that no charge of assessment of any kind shall be made against said tract of land of one hundred fifteen acres for the maintenance or repair of said sewer for which said right-of-way is hereby granted at any time. * * *
"It is further understood and agreed and made a part of the consideration of this instrument that no charge or assessment for building, laying or maintaining said sewer or for any other expense in connection with the operation of said sewer shall ever be made against any lands of the grantors, their heirs or assigns, contiguous to and bordering upon said right-of-way hereinabove granted, but this shall not be construed to mean that no charge shall be made for connecting with said sewer except as hereinafter indicated.
"It is further understood and agreed in further consideration of the execution of this conveyance that the grantors shall have the full right and authority to connect with said sewer hereinabove described the said tract of one hundred fifteen acres hereinabove described, which said land is owned by them, and any part of said lands and any lots or parcels into which said land may be subdivided at any time without any charges for such connection with said sewer other than tap fees and fees for opening up the street and further that no charge or assessment for building or maintaining said sewer or for any other expense in connection with the operation of said sewer shall ever be made against said lands, it being the purpose and intent of this instrument to convey to the grantors herein the full right to connect with said sewer and to use said sewer in connection with said one hundred fifteen acres, without any charge, or other expenses of any kind in connection with the laying, constructing or maintaining of said sewer, as hereinabove mentioned, other than tapping fees for individual lots and charges for opening up the street for connections of each individual lot."
This cause was here previously on demurrer, 262 Ala. 508, 80 So.2d 250. It was then pointed out that we do not decide declaratory judgment cases on demurrer where one of the parties objects to a determination at that time. The instant case is an appeal from a final decree after the taking of testimony.
In 1930, Jett M. Thomas owned 115 acres of unimproved land. The City of Montgomery desired an easement across this property to construct and maintain a sewer line. On May 13, 1930, Thomas deeded the easement to the city and received a covenant from the city that no charge for sewer service would ever be levied by the city against this property of Thomas, his heirs or assigns, including individual lots, except that tapping fees were not exempted. (The pertinent part of the deed is reported).
The complainant Campbell, who owns a lot in the 115 acre tract, brought this suit for a declaratory judgment for himself and other members of his class similarly situated. The bill shows that appellants are levying and collecting a sewer charge from the property owners who live on the tract and derive their title from Thomas.
The trial court held that appellee and the others similarly situated "are exempt by the plain language of the covenants from paying any charge for the use of the sewer serving said property."
The appellant argues that the decree should be reversed because:
(1) the validation proceeding with respect to the bonds issued by appellant was res judicata to the issues raised here;
(2) the covenants in the deed were personal to Thomas and do not go to subsequent purchasers;
(3) the grant of free use of the sewer is ultra vires and void;
(4) the sewer, being in a dedicated street, is subject to any legitimate use of it by the city irrespective of the contract with Thomas.
The first contention is answered by the decision in MacMahon v. Baumhauer, 234 Ala. 482, 175 So. 299, 304. There, the contract stated that "the intent of this instrument being to preserve to the person therein named, and their property, and to their heirs, executors and assigns, the perpetual free use of said sewer with no liability upon them or their property to contribute hereafter toward the further building and construction or maintenance and operation of the sewer." The intervenor Otto held under one of the parties named in the contract. This court said that "the validation proceedings in question could not defeat the property right of the user of the sewerage without charge that was reserved in the contract of sale and purchase to the city to the several owners of the original Conti system of sewerage. That free use was protected by a covenant running with the land. Patterson v. Atlantic Coast Line R. Co., 202 Ala. 583, 81 So. 85. Of this right such original owners and grantors could not be divested except by due process of law — due notice and right to defend or maintain such right of property.
* * * * * *
"The rule of res adjudicata that obtains in this court (citing cases) is not to be applied as against Otto, his grantor, and those similarly situated."
As to the validation proceedings, we think Otto and the appellee Campbell occupied the same position.
We think the Baumhauer case, supra, answers the second contention. Also, a mere reading of the clear terms of the contract evinces unmistakably that the heirs or assigns of Thomas were exempted as well as the grantors. See Virgin v. Garrett, 233 Ala. 34, 169 So. 711; Weil v. Hill, 193 Ala. 407, 69 So. 438; McMahon v. Williams, 79 Ala. 288.
We cannot agree that the execution of the contract by the city was ultra vires. In Oliver v. Water Works and Sanitary Sewer Board, 261 Ala. 234, 73 So.2d 552, 554, we recognized the authority of the city to contract for free use of sewers, and said:
"* * * Until the city has accepted such dedication, it can of course prohibit the connection of that system with its own, or can permit it on such terms as may be agreed on. And the right, duty and powers of the city as to the free use of such system may depend upon stipulation, and not upon the statutes, supra. MacMahon v. Baumhauer, 234 Ala. 482, 175 So. 299."
Appellee introduced in evidence a contract between the appellant and the West Boylston Manufacturing Company of Alabama, dated October 22, 1952, whereby the company was exempted from the payment of any sewer service charge and was to be furnished sewer services without charge by appellant. It is conceded that appellant had the authority to so contract, and that authority is given by Tit. 37, §§ 507 and 601, Code 1940. It thus appears that the city, in 1930, and the Board, in 1952, thought the best interests of the public could be served by exempting certain territory from sewer charges.
It is conceded that "when the city is operating a utility for public use, it is engaged in a proprietary or business enterprise," and the operation of the system by appellant is not a governmental function. Waterworks and Sanitary Sewer Board v. Dean, 260 Ala. 221, 69 So.2d 704, 707. We think the following from Coit v. City of Grand Rapids, 115 Mich. 493, 73 N.W. 811, 813, where the city acquired an easement for a sewer and in return covenanted that the lands should not be assessed for the construction and maintenance of the sewer, is applicable here:
"* * * The contract was fairly and in good faith made, and is fully executed. The city had derived, and is in the full enjoyment of, all its benefits. It cannot and does not offer to restore the consideration, or place plaintiffs in statu quo. If we conceded the premises assumed by defendant, viz. that the contract was wholly ultra vires, we might be compelled to reach the conclusion that the city could not be estopped to set up its invalidity. The defense of ultra vires in this case is most inequitable and unjust. It should not be sustained unless the rigid rules of law require it. 'The good faith of government should never be held less sacred than that of individuals.' * * *"
Certain it is that as between individuals, we would enforce the contract before us. The legal obligation and morality of the city or one of its boards should equal that of the marketplace.
The fourth contention is without merit. The dedication of the street under which the sewer is built occurred many years after the right of free use of the sewer had vested and could not have any effect upon the issues in this proceeding.
Appellant has cited 31 cases in its excellent brief. Every one of them has been read and studied. We do not prolong this opinion by a discussion of them, but each has received our careful consideration.
Since the operation of the system by appellant is not a governmental function, and the city had a right to make the agreement with Thomas, and the agreement itself is clear and unambiguous, and was fairly and in good faith, made, we are convinced that the decree of the lower court should be affirmed.
Appellee has filed a motion for an allowance of an attorneys' fee for services rendered in this cause since the allowance of such fees in the court below. An additional allowance of $1,000 is hereby made to be payable out of the funds to be returned to appellee and those similarly situated. Water Works and Sanitary Sewer Board of Montgomery v. Sullivan, 260 Ala. 214, 69 So.2d 709.
Affirmed.
LIVINGSTON, C. J., and LAWSON, SIMPSON and COLEMAN, JJ., concur.