Penn-O-Tex Oil Co. v. City of Minneapolis

291 N.W. 131, 207 Minn. 307, 1940 Minn. LEXIS 657
CourtSupreme Court of Minnesota
DecidedMarch 29, 1940
DocketNo. 32,450.
StatusPublished
Cited by2 cases

This text of 291 N.W. 131 (Penn-O-Tex Oil Co. v. City of Minneapolis) is published on Counsel Stack Legal Research, covering Supreme Court of Minnesota primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Penn-O-Tex Oil Co. v. City of Minneapolis, 291 N.W. 131, 207 Minn. 307, 1940 Minn. LEXIS 657 (Mich. 1940).

Opinion

Holt, Justice.

Plaintiff, after having entered a 20-year lease with defendant, was advised by its attorneys that it was void and illegal and brought this action under the uniform declaratory judgments act to have the instrument adjudged void and to recover the rent paid. The city asserted its validity. The district court made findings of fact and conclusions of law, upon which a declaratory judgment was rendered decreeing the lease valid and binding on both parties. Plaintiff appeals from the judgment.

*308 No question is raised as to the propriety of plaintiff’s right to sue for a declaratory judgment. The evidence shows that in entering the lease plaintiff had in contemplation spending $125,000 for steel storage tanks and equipment for transferring the petroleum or oil it intended to receive from the barges that would dock. It is evident that plaintiff cannot afford to make such expenditure unless its lease is valid and binding for the full term thereof.

To give an outline of the situation, this may be stated: Many years ago the city of Minneapolis acquired lands bordering the west bank of the Mississippi River for a terminal harbor. Roughly speaking, such lands reached westerly to the top of the bluff and from Bluff street to Riverside Park. What was known as the Bohemian Flats are now the extensive coal dock north of the Washington avenue bridge. South of that bridge is a large freight warehouse and landing dock and other facilities for handling river traffic. A road leads from the docks northerly to Bluff street, also a main railroad track parallel thereto, with necessary sidetracks. A lately built road leads from the lower levee northwesterly on a curve up to Third street. The lease here in question covers a rock shelf formed after a stone quarry was exhausted. It is located east of the east line of Twenty-second avenue south and between Two-and-a-Half street and Fourth street. The lease was evidently carefully prepared by capable attorneys and surveyors, as indicated by tlie plat of the leased ground attached to and made part of the lease. It appears that the leased parcel is at a level some 15 to 20 feet higher than any part of the harbor, docks or wharfs, railroad tracks, or roadways below. In respect to the leased parcel, the city acquired part thereof by deeds and part by two condemnation proceedings. It is assumed that this acquisition was of the fee — not of a mere easement — for the purpose of operating a terminal harbor with the necessary dock and wharf facilities. At any rate, this lease does not affect the title of the city to the ground leased.

The city claims the power and authority to make this lease both under statute and charter provisions. The statute is L. 1913, *309 c. 310, §§ 1, 2 (1 Mason Minn. St. 1927, §§ 1181 and 1185). The title of the act is: “An act to authorize and empower cities in this state of over fifty thousand inhabitants to acquire, construct, own, operate and lease public utilities and to provide the means therefor.” The first section (1181) names the public utilities included, and among these we find “terminal systems.” It does not appear whether in acquiring these lands for a terminal harbor the city proceeded under L. 1913, c. 310, but the public utility of a terminal harbor apparently is within the named “terminal systems.” The city evidently proceeded in making this lease so as to come under this provision of § 1185:

“No ordinance authorizing the lease of any public utility for any period, nor any ordinance renewing any lease, shall go into effect until the expiration of sixty days from and after its passage. And if, within said sixty days, there is filed with the clerk of such city a petition signed by ten per cent of the voters voting at the last preceding election for mayor, in such city, asking that such ordinance be submitted to a popular vote, then such ordinance shall not go into effect unless the question of the adoption of such ordinance shall first be submitted to the electors of such city and are approved by a majority of those voting thereon.”

The court found that 60 days elapsed after the ordinance authorizing this lease was adopted, and that no petition had been filed with the city clerk asking the submission of the ordinance to the voters for approval.

In addition to the power conferred on the city by the above statute, it also claims the power to make the lease by virtue of § 1 of c. I of the charter:

“The City of Minneapolis * * * may * * * take and hold, lease and convey all such real, personal and mixed property as the purposes of the corporation may require, or the transaction or exigencies of the business may render convenient.”

*310 Also § 5, c. IV, the general welfare clause, and § 14, c. IY, reading:

“The City Council shall have the management and control of * * all property of the city * * * and may provide for the sale of any such property, in such manner as it shall consider for the interest of the city.”

It is quite apparent that in the acquisition of such vast quantities of land of sand flats, exhausted quarries, and steep banks for this terminal harbor there was necessarily included some considerable amount which was not needed or adapted for the project, except upon the expenditure of vast sums of money. The court upon uncontradicted evidence found:

“XII. That the real estate covered by said lease is not immediately adjacent to said Mississippi River, and consists of a small shelf of land considerably above dock level and lies directly back of the package and grain terminal; that the land is not susceptible to or needed for the use of the' defendant as a public dock, nor is said land usable for the storage of coal or other bulk commodities owing to its elevation. That any attempt by the city to build structures for the storage of grain or other commodities on said land to be transported thereto from the river by means of conveyors would be impracticable because the cost would be prohibitive. That said land can be used only for the loading and unloading of liquids which may be pumped to said land back and up from the river. That it is impracticable for the defendant to erect municipally owned facilities for the loading, unloading and storage of such liquids.
“XIII. That the premises covered by said lease were originally acquired by the defendant for the purpose of operating a public dock and river terminal and such original acquisition was proper and lawful; that subsequent to its acquisition, conditions became such that said premises were no -longer needed for the direct operation by the defendant of said public dock or river terminal, nor are they needed for any other public use.
*311 “XIV. That the leasing of said premises by the defendant to the plaintiff is proper and reasonably necessary for the proper and efficient operation by the defendant of said public dock and river terminal. That the said leasing of said premises will greatly promote the business and operation of said public dock and river .terminal, and that the making of said lease by the defendant to the plaintiff is within both the express and implied authority of the defendant and is a proper exercise of such authority.”

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Bluebook (online)
291 N.W. 131, 207 Minn. 307, 1940 Minn. LEXIS 657, Counsel Stack Legal Research, https://law.counselstack.com/opinion/penn-o-tex-oil-co-v-city-of-minneapolis-minn-1940.