Moser v. Greenland Hills Realty Co.

LOONEY, J. Gi'eenland Hills Realty Company was chartered under the provisions of subdivision 47, art. 1302, Revised Statutes of 1925, for the purpose of purchasing, sell [178] ing, and subdividing real property in towns, cities, villages, and their suburbs. In February, 1923, the company purchased about 100 acres of land immediately adjoining east and north of the corporate limits of the city of Dallas, bounded on the east by what is known as Greenville or Richardson road. The company platted the land into lots, blocks, streets, and alleys under the general designation of Greenland Hills addition to the city of Dallas, and on or about March 23, 1923, the plat was filed and recorded in the deed records of Dallas county, together with an instrument dedicating the streets and alleys to the use of the public forever, except the company reserved “to itself and to its successors and assigns * * * (2) all water, storm sewer, sanitary sewer, and gas pipes and mains laid in all of said streets and alleys.” As was customary in opening such additions to the city of Dallas, it was contemplated both by the officers of the company directing its affairs and the city authorities that «the addition would ultimately Recome part of the city, and, .with that in view, application was made to the city by the company for permission to connect its sewer main serving the addition with the main sewer line of the city, which -was granted, and the sewer main from this connection was extended through the streets and alleys of the Greenland Hills addition. Shortly prior to January, 1924, appellants, who owned 68 lots in an addition to the city known as Greenville Orest, lying immediately east and across the Greenville or Richardson road from the Greenland Hills addition, also applied to the proper governing authorities of the city for permission to connect the sewerage system that served said lots with the city system, and were granted such permission upon the usual terms and conditions. The sewer and water mains of both additions were laid under the supervision of the engineering department of the city and according to the city’s standard, and, after being connected, the city collected for all connections the regular rental charge for sewer service to suburban lots. The record discloses that, before appellants connected the Greenville Crest sewerage main with that of Greenland Hills, the parties attempted to reach an agreement in regard to the connection, but the evidence is conflicting as to whether an agreement was reached, and, as the finding of the jury was in favor of the contention of appellee, the issue of a connection by agreement is out of the case. It was shown, however, that some time prior to January, 1924, appellants connected their sewer main with that of appellee, across Greenville or Richardson road, which made a continuous connection through Greenland Hills with the city sewer system, and was accepted as satisfactory by the city engineer. At the time this connection was made, appellee had sold all lots in the addition that were served by this main, and both additions had been' taken in as a part of the‘city of Dallas prior to the institution of this suit. Appellee in its petition detailed the history of these transactions, and alleged that appellants, without permission, connected the Greenville Orest sewer system to that of the Greenland Hills system, thus avoiding the necessity of laying a line to connect with the city. Appel-lee sought recovery for the reasonable value to the defendants of the use of plaintiff’s sewer system thus appropriated, alleged to be $3,000. On the verdict of the jury to the effect that it would have cost the defendants the sum of $3,019 to have built a sewer line to a connection with the city’s main, the court gave judgment in favor of the plaintiffs against the defendants for $3,000, with 6 per cent, interest from January 11, 1924 ($3,562.50), from which this appeal is prosecuted. A number of interesting questions have been ably and exhaustively br/efed and argued by counsel for both parties, but, as we view the matter, it will not be necessary to notice but one; that is, the proposition urged by appellants that appellee failed to either allege or prove a cause of action, in that it failed to allege or prove ownership of, or any right to possession of, the Greenland Hills sewer main. As before stated, when these additions were platted and improved, it was contemplated that they would ultimately become part of the city of Dallas, and, with this in mind, the promoters obtained permission from the city authorities to connect their sewer systems with that of the city on condition, it seems, that all mains should be laid according to the city standard and under the supervision of its engineer. The dedication of the streets and alleys in Greenland Hills addition was accepted by the city, all sewer and other mains were laid and connections made under the supervision of its engineer, and, after resident lots were connected, the city imposed and collected from individuals charges for sewer service. We think it is clear that appellee was authorized, as an incident to the enterprise it was prosecuting — that is, subdividing and selling lots — to improve the property, including the right 'to lay sewer and other utility mains and pipes and to connect with the mains as appurtenances belonging to the lots. If it be said, however, that, after exhausting this implied power, appellee still retained ownership of the sewer system and could sell to whomsoever it pleased the privilege [179] of making connections from the outside, or exercise other acts of ownership and control, it occurs to us that the reservation took from the city control and supervision of the system, and materially interfered with the usual exercise of the police power of its officials. Appellant was not authorized to build and own a sewer system, except as an incident to the proper and profitable exercise of the power expressly conferred by its charter, it was not authorized to either build, own, or operate a sewer system as an independent enterprise. We are of the opinion, therefore, that, if the reservation means ownership, with its usual incidents, clearly it was against public policy. There is no policy more firmly established by the Constitution, statutes, and judicial decisions of this state than the one that prohibits a corporation from exceeding its charter powers. For the commission of such offense, quo warranto proceedings are provided. Article 6253 (6398) (4343), R. S. 1925. In Roaring Springs Town Site Co. v. Paducah Tele. Co., 109. Tex. 452, 456, 212 S. W. 147, 148, in regard to the right of a dedicator to impose conditions or restrictions, the Supreme Court used this language: “For, the general rule that the dedicator may impose such restrictions as he may see fit on making a dedication of his property is subject to the thoroughly established limitation that the restriction be not repugnant to the dedication or against public policy” — citing authorities. In Jones v. Carter, 45 Tex. Civ. App. 450, 456, 101 S. W. 514, 517, the Galveston Court of Civil Appeals announced the same doctrine in an apt quotation from 9 Amer. and English Ency. of Law, p. 75, as follows: “The right of the dedicator to annex conditions to the dedication is limited, however, by the rule that the conditions must not be such as would prevent a reasonable enjoyment of the dedication, ,or be in any way inconsistent with such enjoyment. No condition may be annexed which will take the property from the control of the duly authorized public officers, or which will in any way impair the usual exercise of the police power by the authorities. Should an attempt be made to annex such" conditions, the dedication will be upheld, and the conditions be held void.” We are of the opinion, therefore, that the only interest in the sewer mains that was retained by appellant to itself, its successors and assigns, by the reservation contained in the instrument of dedication executed under the. circumstances, was the right to connect resident lots of the addition to the system. However, if we should accept the view of appellee, that the .legal effect of the reservation was to retain title to the sewer mains to itself, its successors and assigns, certainly it was stripped of all interest when it parted with title to the lots served by the system, and its power over the subject-matter of litigation was thereby exhausted. Furthermore, the assertion of private ownership over the sewer mains necessarily took from or materially impaired' the usual exercise of police power by city authorities over the sewer system and involved the exercise of powers by the corporation in excess of the purpose clause of its charter, and for these reasons we are of the opinion the reservation must be condemned as being in contravention of public policy. We therefore sustain the assignments and proposition under discussion, reverse the judgment of the trial court, and render-judgment in favor of appellants. Reversed and rendered.