Court Opinion

ID: 5011550
Source: CourtListenerOpinion
Date Created: 2021-10-01 02:50:58.421361+00
Date Added: 2024-06-11T08:17:26.656808
License: Public Domain

NORVELL, Justice
(concurring).
The City of San Antonio and the Guadalupe-Blanco River Authority, on October 24, 1942, entered into a written contract which provided that the River Authority should have a lease upon the “Comal Plant”' coupled with an option to purchase the same in accordance with the terms of the contract. The “Comal Plant” was conveyed to the City by the San Antonio Public Service Company, a private corporation (acting by trustees in dissolution), along *524with other property, on October 24, 1942. The City of San Antonio-G. B. R. A. agreement recited that: “The City of San Antonio has entered into a contract and has •formulated a plan under which it proposes •immediately to acquire all of said electric properties (owned by San Antonio Public Service Company) except electric •distribution properties serving the cities •of New Braunfels, Hondo and Boerne, and •territory immediately adjacent thereto, subject to the rights, privileges and agreements conferred on the Authority under the terms mid provisions of this contract.”
If the above provision be valid, it neces-sarily follows that the City received title to the property from the San Antonio Public Service Company burdened with the •contractual rights or interests of the Guadalupe-Bianco River Authority evidenced by its contract with the City.
The contract between the City and the River Authority further provided that the term of the Authority’s lease should begin on November 1, 1942. Therefore, if the agreement be valid, the possession of the “Comal Plant” by the City or by the appellees as a Board of Trustees was limited to a period of seven or eight days.
It is clear that the question of whether or not appellees, the Board of Trustees, should have turned the Comal Plant over to the River Authority or its assignee on November 1, 1942, depends entirely upon the question of the validity of the contract entered into between the City and the Guadalupe-Bianco River Authority on October 24, 1942.
This then is a suit (insofar as the in-junctive feature thereof is concerned) which has for its purpose the avoidance of a municipal contract and the recovery of property owned by the City which has been conveyed away by an allegedly invalid ■or illegal contract.
It is well settled that a person must have a litigable interest in the subject matter of a suit in order to maintain the action. For instance, if A and B make a contract and adopt a certain interpretation thereof in carrying it out, C, a third party, may not maintain a suit to compel A and B to adopt a different construction of the contract. Generally speaking, some right of C, usually a property right, must be affected by operations under the contract before he may litigate over its construction.
This principle which demands the presence of a litigable interest in a plaintiff is applicable to suits involving municipal corporations, their contracts or properties. City of San Antonio v. Strumberg, 70 Tex. 366, 7 S.W. 754; Fisher v. City of Bartlett, Tex.Civ.App., 76 S.W.2d 535.
The contention of appellees that they have such an interest as entitles them to maintain a suit to avoid a municipal contract and recover municipal property is based upon some sort of trust theory. Although the books contain numerous decisions dealing with legal controversies involving municipal contracts, in which the question of the existence of a litigable interest is discussed, appellees have not, to my mind, cited an authority having to do with the law of municipal corporations which supports their position. In this field and in connection with the question of the existence of a litigable interest, it seems that the only “trust theory” having support in the authorities is that which regards the municipal corporation as a trustee for and in behalf of its citizens, in much the same way as a private corporation is regarded as a trustee for and in behalf of its stockholders. In certain kinds or types of litigation, when the authority vested with the right (generally by charter) to institute or maintain legal actions for and on behalf of the corporation fails to do so, the stockholder (of the private corporation) or the citizen or taxpayer (of the municipal corporation) may maintain a suit. This theory need not be here discussed at length. Dillon on Municipal Corporations, a standard text authority, contains a full and complete analysis of the matter. See IV Dillon, 5th Ed., Chapter XXXI, pp. 2746-2806, particularly §§ 1579, 1580, 1586, 1587 and 1588. It is sufficient to say here that this theory or rule is based upon the proposition that the plaintiff occupies the position of a cestui que trust and the municipal corporation is regarded as a trustee.
This suit was seemingly instituted on rather the converse of the theory stated, i. e., that appellees are trustees, and that the City, the bondholders, or the public at large are the cestuis que trustent.
Since the term “trustee” has a popular as well as legal definition, the two should not be confused. Popularly speaking, a trustee is one who is trusted or one in whom confidence is reposed. In Article 1115, Vernon’s Ann. Civ. Stats., the term “board of trustees” is obviously used in its popular sense. Legally speaking, a trust exists when one person, natural or arti*525ficial, holds the legal title to property for the benefit of and subject to the equitable rights of another. 65 C.J. 212.
In the legal sense, the appellees are not trustees at all. As a board they constitute a department and agency of the City to take charge of and operate for the City its gas and electric system. Sifford v. Waterworks Board of Trustees, Tex.Civ.App., 70 S.W.2d 476.
In the American Law Institute’s “Restatement of the Law,” it is stated that: “an agency is not a trust. * * * A trustee has title to the trust property; an agent as such does not have title to the property of his principal, although he may have powers with respect to it. * * * ” Restatement of the Law, Trusts, Vol. 1, p. 28, § 8.
The appellees here are not the owners of the property involved, nor do they hold the legal title thereto.
In my opinion the original disposition of this appeal was correct. Appellees not being trustees cannot as trustees challenge the validity of the City’s contract. Further, appellees have not pleaded that they occupy the position of cestuis que trus-tent with reference to the property involved, and that the City as trustee has failed and refused to act.
I think we need go no further. The principle which demands that a plaintiff have a litigable interest in order to maintain a suit is based upon a sound public policy. Existing rules by which the existence of a litigable interest may be determined seem adequate and in accordance with correct legal theory. The application of these rules necessitates a reversal of the trial court’s decree.
I concur in the majority opinion prepared by Associate Justice MURRAY.