Title: Landau v. City of Leawood

State: kansas

Issuer: Kansas Supreme Court

Document:

214 Kan. 104 (1974)
519 P.2d 676
MARCUS B. LANDAU, Appellant,
v.
THE CITY OF LEAWOOD, Appellee.
No. 47,129

Supreme Court of Kansas.
Opinion filed March 2, 1974.
Frank M. Rice, of Jones, Schroer, Rice and Dillon, of Topeka, argued the cause, and Matthew J. Dowd, of the same firm, was with him on the brief for the appellant.
R. Kent Sullivan, of Payne and Jones, Chartered, of Olathe, argued the cause, and Keith Martin, of the same firm, and Max Bagby, of Leawood, were with him on the brief for the appellee.
The opinion of the court was delivered by
FOTH, C.:
This is a class action in which plaintiff sued on behalf of himself and other landowners in Overland Park who are connected to a sewer system operated by the city of Leawood. He sought to enjoin Leawood from charging his class more than fifteen dollars per year for the use of the sewer, and to recover sums previously paid in excess of that amount. His claim is based on certain covenants in "sewer declarations" of a private sewer company which he alleges are binding on the city as the company's successor in interest. Both parties moved for summary judgment, the trial court denied relief, and plaintiff has appealed.
*105 The facts are not disputed, and are set out in the trial court's order, together with its conclusions of law:
CONCLUSIONS OF LAW
We agree with the trial court, and concur generally in its reasoning.
It will be observed that the trial court dealt separately with two groups of plaintiff's class; those who bought their property before July 1, 1947, and those who bought afterwards. That is the effective date of the act authorizing the city to acquire and operate this private sewer system (Laws 1947, ch. 131.)
As to those purchasing after July 1, 1947, the answer is clear. They were on notice of the provisions of the act, and must be deemed to have contracted with reference thereto. Securities Acceptance Corporation v. Perkins, 182 Kan. 169, 318 P.2d 1058; Rankin v. Ware., 88 Kan. 23, 127 Pac. 531; Edwards v. United States, 215 F. Supp. 382 (1963); 17 C.J.S., Contracts, § 22. Cf. Sebal v. Columbian Nat. Life Ins. Co., 144 Kan. 266, 58 P.2d 1108; Stevens v. Farmers Elevator Mutual Ins. Co., 197 Kan. 74, 415 P.2d 236. They therefore knew that if the city ever acquired their sewer system it would have the statutory right under what is now K.S.A. 12-631c "to establish just, reasonable, and equitable service charges to be paid to such city for the use of such sewer system."
*108 Equally important, they also knew that the same section provided that "No revenue derived from ad valorem taxes shall be used for the acquisition, operation and maintenance of the sewer facilities provided for in this act." This provision, in effect, made it mandatory that the city fix charges sufficient to defray the cost of maintenance and operation; it was forbidden to use tax money for these purposes. It is undisputed in this case that even the $15 per year contended for by plaintiff would be insufficient to cover current maintenance and operating costs. (There is no contention that the current service charges are not "just, reasonable and equitable.")
If the city were bound by a $15 per year limitation it could not operate the sewer system  an operation obviously essential to the health, safety and welfare of the community, as the trial court noted. We therefore agree with the trial court that even if the city intended to contract for such a limitation it would have been ultra vires. A city cannot contract away its statutory duties and responsibilities, particularly where they touch upon the police power. Northern Pacific Railway v. Duluth., 208 U.S. 583, 52 L. Ed. 630, 28 S. Ct. 341; N.Y. & N.E. Railroad Co. v. Bristol., 151 U.S. 556, 38 L. Ed. 269, 14 S. Ct. 437. Cf. Phillips Petroleum Co. v. Jenkins, 297 U.S. 629, 80 L. Ed. 943, 56 S. Ct. 611; State, ex rel., v. City of Topeka, 176 Kan. 240, 270 P.2d 270; Board of Education v. Phillips., 67 Kan. 549, 73 Pac. 97; City of Clearwater v. Bonsey, 180 So. 2d 200 (Fla., 1965); City of Daytona Beach v. Stansfield, 258 So. 2d 809 (Fla., 1972). (In the Florida cases it was held that a city could not by contract bind itself to sell water at less than cost, and that a contract which purported to do so would not be enforced.) And, of course, persons dealing with a municipality are bound to take notice of the limitations on its authority to contract. Weil & Associates v. Urban Renewal Agency, 206 Kan. 405, 479 P.2d 875.
As to those who bought prior to the 1947 act, the situation is slightly different in that they cannot be charged with notice of the specific terms of the legislation. They can, however, be held to recognize that covenants ("restrictive" or otherwise) will be enforced in equity only so long as they remain reasonable in the light of their purpose. Maurer v. J.C. Nichols Co., 207 Kan. 315, 485 P.2d 174; Hecht v. Stephens, 204 Kan. 559, 464 P.2d 258; Clark v. Vaughan., 131 Kan. 438, 292 Pac. 783.
*109 Insofar as the city is concerned, enforcement at this time is clearly unreasonable because, as pointed out above, compliance with the contractual limitations would render it impossible for the city to operate the system. What may have been reasonable in 1945 is not in 1974.
We note here that the original covenantor, Kroh Bros., Inc., is not a party to this lawsuit. We are therefore not called upon to decide whether the 1945 declaration, with its $10.00 per year limit, would be enforceable against it. It may even be that its 1963 deed to the city of Leawood  which the parties could anticipate would be compelled to charge more than the agreed maximum  constituted a breach of the corporation's agreement with plaintiff and his class. Neither do we decide whether the maximum limit is a covenant "running with" and "burdening" the land comprising the sewer system. There are obvious theoretical and practical difficulties with such a concept. What we do decide is that the covenant cannot be enforced against the city of Leawood where the result would be to render the city incapable of carrying out its statutory responsibilities.
What has been said disposes of plaintiff's argument that the city's action impairs the obligation of his class's contracts. As to those buying after July 1, 1947, there was no contract not subject to the express qualifications of the statute. As to those buying before, there was no "impairment" beyond that always present when equity refuses to enforce a covenant which has outlived its usefulness.
The court below correctly refused to enforce the covenant, and its judgment is affirmed.
APPROVED BY THE COURT.