Hayward v. Board of Trustees

Mr. Justice Elliott delivered the opinion of the court. The demurrer to the complaint is based upon two grounds: first, that there was want of authority on the part of the town board to enter into the contract sued on; second, that the contract is in derogation of the statutes of the United States under which the patent was to be applied for. 1. Under the laws of this state, “ a municipal corporation can exercise only such powers as are granted to it by its charter or by the general law of the state, either in express words or by necessary or reasonable implication, or such as are incidental to the powers expressly granted, or such as are essential to the objects and purposes of the corporation.” City of Durango v. Reinsberg, 16 Colo. 327. Counsel for plaintiffs cite section 3310, chapter 109, General Statutes, concerning towns and cities as sufficient to uphold the contract sued on. The section reads as follows: “ Cities and towns organized as provided in this chapter shall be bodies politic and corporate, under such name and [37] style as they may select at the time of their organization, and may sue or be sued; contract or be contracted with; acquire and hold property, real and personal; have a common seal which they may change and alter at pleasure, and have such other privileges as are incident to corporations of like character or degree, not inconsistent with the laws of the state.” Gen. Stats., p. 964. 2. Undoubtedly, an incorporated town or city may acquire and hold such-real and personal property as may be necessary to enable it to carry on its corporate business and exercise its proper municipal functions ; but it is idle to claim that a municipal corporation can lawfully engage in the business of buying, selling, or dealing generally in real estate, either as principal or broker. 3. The powers of cities and towns incorporated under the general laws of this state are specified in section 3312, General Statutes. It is not contended that this section expressly authorizes the contract sued on; but it is insisted that such contract is authorized by the statute of 1881 concerning “ town sites.” See Session Laws, 1881, p. 237; General Statutes, chap. 108. The several acts of Congress referred to in the contract sued on were intended to confer certain privileges and-benefits upon parties interested in town-site entries upon the public lands of the United States. The statute of 1881, supra, was intended as a supplement to such congressional legislation. It was competent for the corporate authorities of Red Cliff to employ counsel to assist them in ■ obtaining a town-site patent from the United States, and to pay reasonable compensation for such legal seiwicés; but there is nothing either in the acts of Congress or in the statute of 1881 to authorize such a contract as was entered into in this case; nor does the complaint disclose facts tending to justify such a contract. The acts of Congress do not require the corporate authorities of a town or city to apply for town-site patents ; they merely confer the privilege of acquiring such patents upon [38] certain terms and conditions. When a patent is acquired the corporate authorities become charged with a trust which they are required to execute in accordance with the law; and they cannot lawfully enter into any contract by which to charge the beneficiaries of such trust with unnecessary burdens. The agreement of the town board to pay to Hayward & Cooley “the sum of ten.dollars ($10.00) for each and every lot or parcel of lot actually sold and conveyed under and by virtue of said patent, immediately upon the delivery of the deed or deeds for the same unto the respective purchasers thereof,” was calculated to increase the price of each lot or parcel of lot to the purchaser, or else to materially depreciate the benefit which the town would receive from the grant. It was not competent for the corporate authorities to make a contract charging the trust property or the beneficiaries thereof to an indefinite amount, in addition to the charges authorized by the several legislative acts creating the trust and providing for its execution. The size of the lots or parcels of lots was in no way specified or made certain by the contract, and so the compensation to the attorneys under the contract might be unreasonable and unconscionable. The contract is not only indefinite in amount, but is indefinite in duration ; it is a continuing executory contract on the part of the corporate authorities — a contract not contemplated by the ■ several legislative acts under which the patent was acquired and in accordance with which the lands must be disposed of; it must, therefore, be held illegal, and its enforcement refused. The district court did not err in sustaining the demurrer to the complaint, and its judgment must accordingly be affirmed. Affirmed. Mr. Justice Goddard, having determined this cause below, did not sit at the hearing in this court.