The City of Palestine v. N. M. Barnes et al., 50 Tex. 538

Moore, Chief Justice. The “market ordinance” passed by the city council August, 1875; the agreement between appellant and the Palestine Market - house Association dated September 2, 1878; and the deed from Mrs. S. A. E. Fowler to the market-house association, for the lot of ground sued for, dated September 28,1875, show upon their face that they are the several parts of a contract between the city of Palestine and the Palestine Market-house Association, and they must be so treated and considered, in order to enable us to properly understand them and determine the real import and object of the contract.

The terms of the contract must unquestionably have been discussed and understood when the ordinance was adopted by the city, for unmistakable reference is made in it to the contemplated contract with the market-house association and the purchase of the lot. . The ordinance was evidently adopted to confer upon the mayor and aldermen authority to contract with the market-house association, and also for the purpose of giving effect to the terms and stipulations of the contract which they were expected to make.

The instrument by which the city, by the mayor and aldermen, and the market-house association, by its president and secretary, sought to embody tbe terms of the contract, as we have said had been understood and agreed upon, bears date September 2, 1875, and stipulates for the building of a market-house by said market-house association, on the lot which, as stated in said agreement, was bought by said association “ from S. A. E.. Fowler, by deed dated 28th day of September, A.

I).' 1875.” blow, although this instrument dated September 2, 1875, is certainly a most singular and inartificially drawn instrument, when construed in connection with the ordinance by which it was evidently authorized, it cannot be denied that the market-house association thereby undertook and bound itself to erect a house upon the lot referred to, to be used as a market-house; that the city should have the right to usé and occupy one room in it for the time indicated in said agreement; that the association should have the use and enjoyment of the lot and balance of the building for the purposes of the association, together with the rights, privileges, and immunities in said agreement stipulated; and that on the termination of this agreement the city of Palestine should have a title in fee for the entire lot.

Whether it was supposed by the contracting parties that the title in fee to the lot was vested in the city by the instrument at the date of its execution, by estoppel or otherwise, or-whether it was the intention that the fee should remain -in the market-house association until the expiration of the term of twenty-one years during which they were entitled to the privileges stipulated in said instrument, it would be difficult to say; but it is, perhaps, of no great moment that we should do so at present.

Whether the market-house association held in effect under a lease from the city, or the city was a tenant for a term of years under contract with the market-house association, with or without remainder in fee, will make no difference in the result of this case as now presented, whatever questions may arise respecting the property a.t a future day.

Although the suit is for the entire lot, yet it appears that appellees are in possession of the lot and building, with the exception of the room of which it is stipulated in the agreement the city should have the exclusive use and enjoyment for the term of twenty-one years; and unless appellees show that they are entitled to it against appellant, the judgment must be reversed and they must ultimately fail in their action.

Conceding, then, that the title in fee remained in the market-house association, still it cannot be denied that appellant is in possession under a contract with the market-house association, who on this theory of -the case was at the date of this contract, and when possession was delivered to appellant, the owner in fee of the property, blow, unless this contract «was an absolute nullity, or if merely voidable unless appellees have shown that they have the right to avoid it, they unquestionably have no cause to complain.

Was, then, the agreement of September 2,1875, which was executed long before appellees’ judgment, so far as regards the room held by it, void or voidable at the instance of appellees ?

They insist that the entire contract is void, because the city of Palestine had no authority to delegate to the market-house association some of the privileges stipulated in said contract; that the exemptions from taxation as therein agreed had never been legally secured to the association,because no ordinance to this effect has ever been enacted, and that the ordinances which were intended to secure to the association the privileges stipulated for in said agreement had not been enforced. But we are unable to see wherein appellant exceeded the just limits of its authority in said contract.

Its terms and stipulations seem to be within the limit of its authority under the charter and ordinances under which it acted. The city was authorized by ordinance to exempt the property from city taxes; and the contract showing that this had been stipulated was ratified and approved by the city, and was unquestionably just as binding upon it, as if it had adopted an ordinance to this effect. There was no failure of the city in enforcing its ordinances. It did not stipulate that it would see that violators of the ordinances should be convicted.

The ordinances were not repealed, and the city officers prosecuted whenever charges of violation of them were properly made. But if these objections of appellees were borne out by the record, they furnish no ground for cancelling or annulling the contract. Certainly none of them shew that it was absolutely void;—they, at most, merely attack the consideration in part moving the market-house association to make the contract. It is not insisted, as we understand appellees’ counsel, that all the stipulations on the part of the city are ultra vires.

But if they are, still, as the contract was, notwithstanding its want of consideration, executed to the extent at least of putting appellant in possession of the room claimed by it, the title of appellant cannot be said to be void; and if it is conceded to be voidable, appellees have not shown any right in themselves to avoid it. Appellees, of course, acquired no greater estate than that bound by the judgment under which they purchased. The right to the tenement held by appellant was not in the market-house association at the date of the judgment, but had long before been vested in appellant.

The date of the lien foreclosed by the judgment is not shown. It is argued by appellees as if this lien grew out of the building of the house in part occupied by appellant; but if so, this is not shown, nor does it appear that the lien was fixed against appellant. The effect of the sale, on the facts as presented by the record, could only vest in the purchaser such title as the market-house association had at the date of the judgment.

It follows, giving to the agreement of September 2, 1875, the construction which we have heretofore conceded, that appellees, by their purchase, got title to the entire lot, subject to the easement previously vested in appellant, if said lot was at the time the subject of sale under execution.

Appellees insist that they acquired by their purchase under the judgment all the corporate rights, privileges, and franchises of said market-house association, because the same were attached or appurtenant to said lot, and as assignees of said association they were entitled to all its equitable rights and remedies against appellant under said contract. There is, however, in our opinion, no foundation for such an assumption. It is a novel doctrine, for which no authority has been cited, that corporate franchises are ever attached to, or pass as incidents to land.

If the franchises of a corporation could not be exercised or enjoyed except in a particular locality, the inability of the corporation to use or exercise them in the required locality might suspend or work an absolute destruction of its corporate existence; but, unquestionably, the forced or involuntary sale of its place of business under execution, if this can be done, vests in the purchaser at such sale neither its corporate existence nor franchises.

On the contrary, instead of the corporate franchises being an appurtenance of the lot, as appellees insist, if they can only be exercised on the lot, then the lot is an incident of the corporation, and can no more be sold under execution than could the corporation itself. (The Susquehanna, &c., v. Bonham, 9 W. & S., 28 ; Gue v. Tide Water, &c., 24 How., 263; Plymouth, &c., v. Colwell, 39 Penn. St., 337; Youngman v. The Elmira, &c., 65 Penn. St., 278 ; James v. The Pontiac, 8 Mich., 91.) The judgment is reversed and the cause remanded. Reversed and remanded.