Appeal from the Circuit Court of Clark County; the Hon.
Richard E. Scott, Judge, presiding.
JUSTICE GREEN DELIVERED THE OPINION OF THE COURT:
On September 24, 1981, plaintiff, city of Marshall, filed suit in the circuit court of Clark County against defendant, Clyde Knowles (Developer). The city sought (1) a declaratory judgment concerning the validity of a document entitled "Water Line Agreement" (Agreement) purportedly entered into between the parties, and (2) specific performance by the Developer of certain terms of the Agreement. After an evidentiary hearing, the court entered an order on December 1, 1983, upholding the validity of the document and ordering Developer to make certain conveyances. The Developer appealed, and the city cross-appealed but withdrew the cross-appeal at oral argument. We affirm the decree but remand.
The Agreement was dated April 12, 1971, and was signed on behalf of the city by its mayor and by the Developer. It recited that (1) city had granted Developer permission to connect a six-inch water main from a certain city water main to his property; (2) the parties desired operation to be beneficial to those who wished to obtain city water; (3) city was willing (a) to furnish water to lines connected to Developer's waterline; (b) to "take over operation" of those service lines connected to Developer's line; (c) to assume maintenance of those lines one year after their installation; and (d) to assume the maintenance of Developer's line "at such time as it is conveyed to the City at a date not earlier than two years nor later than ten years from the date" of the Agreement on terms stated in the Agreement. (Emphasis added.)
By the terms of the Agreement the Developer agreed (1) to convey to city all of his rights and interest in all service lines and meters connected thereto as soon as installed, (2) to maintain those service lines and meters for one year after their installation, and (3) to assign to city all right-of-way easements from the point of connection of the city water main to Developer's land upon the completion of Developer's waterline and the service lines. The city (1) agreed to maintain service lines after the one-year period of Developer's responsibility to do so, (2) agreed to furnish and maintain a water supply, (3) granted Developer the right to sell water taps to Developer's waterline at prices to be determined by Developer, provided that, after the Developer's waterline was conveyed to the city, the city would permit only such additional taps as would not interfere with maintaining reasonable pressure through the six-inch waterline, and (4) granted Developer the right, at any time and without charge, to connect as many taps as he wished to the portion of the main that was on his property, as long as the taps were for the purpose of serving his property.
At the time of the December 1, 1983, decree, more than 12 years had elapsed since the July 12, 1971, Agreement. The Developer had made no conveyance of the main or of any easements. The city had assumed responsibility for various service lines, but no formal conveyance of those lines had been made to the city. The decree (1) declared the Agreement to be binding and that the city was entitled to ownership of the waterlines and easements claimed, and (2) ordered the Developer to make specific performance of the Agreement by conveying to the city (a) Developer's interest in the six-inch waterline, (b) "all easements procured or owned by [Developer] on which the six-inch water main is located," (c) an easement "for the waterline on his property," and (d) all interest in the service lines to the point of meter installation.
On appeal, the parties do not dispute that the Agreement purported to require Developer to make the various conveyances within 10 years and that he has not done so. The Developer's contentions on appeal fit into two categories. First, he maintains that the Agreement was not binding as to the city because of the city's failure to follow the statutory procedures for acquiring a waterworks system. He maintains that if the Agreement were not binding on the city, the Agreement would lack mutuality and thus would not be binding on him. Second, he asserts that specific performance should not have been granted, because (1) to the extent that the rights and interests to be conveyed were realty, neither the Agreement nor the evidence produced sufficient description of the location of the interests to permit specific performance, and (2) to the extent that the interests were personalty, the interests were not shown to be sufficiently unique to justify specific performance.
The Developer's contention that the city had no authority to enter into the Agreement is based upon section 11-127-1 of the Illinois Municipal Code, which states:
"In all municipalities where waterworks have been constructed, the corporate authorities of the municipality may purchase or lease the waterworks from the owner thereof. However, such a lease or purchase is not binding upon the municipality until the corporate authorities pass an ordinance which includes the terms of the lease or purchase therein." Ill. Rev. Stat. 1969, ch. 24, par. 11-127-1.
The Developer then calls our attention to section 11-130-2 of the Illinois Municipal Code, which defines the term "`waterworks', as used in this Division 130" or article 11 of the Illinois Municipal Code to mean and include "a waterworks system in its entirety or any integral part thereof, including mains, hydrants, meters, valves, standpipes, storage tanks, pumping tanks, intakes, wells, impounding reservoirs, or purification plants." (Emphasis added.) (Ill. Rev. Stat. 1969, ch. 24, par. 11-130-2.) He contends that the Agreement involved a purchase of a main and some meters and thus was a purchase of a "waterworks" requiring the passage of an ordinance to make the agreement valid. The record here indicates that the city approved the agreement by a resolution on July 12, 1969, but no ordinance authorizing the agreement was ever passed.
Divisions 127, 128, 129, and 130, all part of the portion of article 11 devoted to water supply and sewage systems (Ill. Rev. Stat. 1969, ch. 24, pars. 11-127-1, 11-128-1, 11-129-1, 11-130-1) set forth various ways that a municipality may "purchase," "lease," construct, build, enlarge, or improve a "waterworks." All require council authorization by ordinance except Division 128, which states that the council may approve by ordinance or resolution (Ill. Rev. Stat. 1969, ch. 24, par. 11-128-1). However, Division 128 requires that the council's action be approved at referendum (Ill. Rev. Stat. 1969, ch. 24, par. 11-128-3), which was also not done here. Accordingly, if the Agreement constituted the "purchase" of a "waterworks" by the city, the required statutory procedures were not followed.
In the strict sense, the Agreement does provide for a "purchase" by the city of pipes and easements, because the city is required to give consideration. (See definition of "Purchase," Black's Law Dictionary 1110 (5th ed. 1979).) However, the whole tenor of the previously mentioned divisions of article 11 is to protect the citizens of the municipality from the incurring by the municipality of large expenditures or substantial indebtedness in regard to the acquisition of water facilities without its governing body proceeding in a prescribed formal manner. Each division speaks of borrowing or appropriating money, levying and collecting taxes, or issuing bonds in order to finance the transaction described in the division. Here, the city was not required by the Agreement to make a substantial monetary outlay.
The principal obligations assumed by the city were to maintain service lines and one six-inch water main and to serve additional customers on the periphery of its service area. It was not a substantial obligation in comparison to the total functioning of its waterworks. The money it would collect from the sale of water would likely cover its additional expenses. An ordinance is not required to authorize the city to take on new customers for its water service. The Developer was allowed to retain a right to tap the main to obtain water for use by him on his premises, but the expenses involved in furnishing that amount of water would appear to be de minimis in comparison to the money the city would obtain for sale of the rest of the water that passed through the main.
• 1 Considering the terms of the Agreement and the circumstances of its execution, we conclude that, rather than providing for a "purchase" by the city within the meaning of the Code, the Agreement provides for a transaction which is similar to a common law dedication to the public by the Developer of the facilities described therein. Were it not for the consideration given by the city to the Developer, the transaction could be considered to be a gift. One dedicating property does receive consideration when he benefits from the property being used by the public. That consideration supports the dedication. (Warren v. President & Trustees (1853), 15 Ill. 236.) The reservation of certain rights by the one making the dedication does not defeat the dedication if the reservation of the rights is not contrary to public policy and does not defeat the public control and use of the property dedicated. (Village of Lake Bluff v. Dalitsch (1953), 415 Ill. 476, 114 N.E.2d 654.) Here, the Developer reserved the right to tap the main for his own use without charge and to sell the right to tap the six-inch main to others. The latter would then pay the city for the water they used. The reservations would not interfere with the city's control and use of the property. The reservations were not contrary to public policy.
As the transaction arising from the Agreement was not a "purchase" by the city, its action by resolution was sufficient to authorize its entry into the agreement and to bind the city. Accordingly, there was no lack of mutuality of obligation between the parties to the Agreement. The trial court properly found it to be binding on the parties and that the city was entitled to ...