St. Louis Terminals Corp. v. City of St. Louis , 535 S.W.2d 593 ( 1976 )

KELLY, Judge

(dissenting).

I cannot concur in the decision of the majority that the “Agreement” of May 1, 1967, can properly be termed a lease. We are concerned here with a wharf — the North Market Street Dock — erected with public funds from a Bond Issue voted for dock and waterfront improvements pursuant to the power bestowed on the City to construct wharves. Ordinarily a municipal corporation has no proprietary rights in its public wharves, and whatever rights it has in them it holds in trust for the public. 56 Am.Jur. Wharves, § 25. Public wharves, by their nature, are for the use of the public and a lease of a wharf is a particular kind of a lease, being merely a letting of the franchise of wharfage; no property in or right to the wharf itself passes to the lessee. 94 C.J.S. Wharves § 5a, New York Pilot Comm’rs v. Clark, 33 N.Y. 251, (1865), Taylor v. Beebe, 26 N.Y.Super. 262 (1865). It is in this context that the power to lease a portion of the wharf for any purpose tending to facilitate the trade of the City was bestowed upon the City in Art. I, § 1(16) of the Charter of the City of St. Louis. This same Charter provision is the source of the City’s authority to provide and maintain a harbor and wharves, to regulate the use thereof, and to impose wharf-age and other charges therefor.¹ The term “lease” when used with reference to wharves has a meaning different than when used in respect to ordinary lessor-lessee contracts. It is not necessary to burden this opinion with a lengthy discussion of the law of Navigable Water, but it cannot be contradicted that the Mississippi River is a navigable stream. Nor, do I believe, that it is open to debate that the facility plaintiff is “operating” is a public wharf constructed as an aid to navigation and commerce along the Mississippi River. The Supreme Court, in Belcher’s Sugar Refinery Co. v. St. Louis Grain Elevator Co., 101 Mo. 192, 13 S.W. 822 (1890), 1.c. 824, took notice of the nature of a wharf, when it said:

“A wharf is intended to afford convenience for the landing of vessels, the loading or unloading of their cargoes, and to supply a place on which the wares discharged from vessels, or awaiting shipment, may be laid or deposited; . Wharves on our rivers are not only ways for traveling, but they are necessarily used for the deposit of merchandise.”

Because of the nature of a municipally owned wharf, and more particularly, a public wharf, we believe that it should not go unnoticed that both the Charter of this City of St. Louis empowering the City to lease its wharves specifically limits that power to lease “portions” of the wharf. § 237.220, RSMo. 1969, V.A.M.S., likewise limits a lease to “any portion” of the City wharf. This term “portion” implies less than the whole. The phraseology of the provision of the City Charter of the City of St. Louis was chosen, in my opinion, to prevent the leasing by the City of the entire wharf to any one lessee. The statute, § 237.210 RSMo. 1969, V.A.M.S. — enacted in 1872— precludes any lease of a City wharf to any owner or association of owners of any steamboat, or boats or, vessels so as to give any such lessee a monopoly of said portion of such wharf. This is a logical restriction with respect to the right of the public to use a municipally owned wharf.

Belcher, supra, provided that the defendant, which was organized under a special act creating a corporation for the purpose of acquiring frontage on the Mississippi River not in excess of 500 feet for the erection and maintenance of grain elevators and uses connected therewith, upon the public wharves of the City of St. Louis and when the lease executed between the City and the defendant corporation, only a “portion of the unpaved wharf” was leased to the defendant, the remainder of the wharf being left available for public usage. This was held to be a valid exercise of the power granted the City by the Charter of 1876 to “set aside and lease portions of the unpaved wharves for special purposes,” among which was for the erection of grain elevators.

A reading of the “agreement” demonstrates that the City “granted” to “the Operator” the exclusive right and privilege of “occupying and using” the “dock and terminal facilities” including the City railway tracks and the river frontage to a point eight feet north of the north end of the old dock. The consideration to be paid the City by the “Operator” was based on “tonnage handled through the Terminal.” The “Operator” guaranteed the City a minimum “annual tollage/rental” of $37,500.00 per annum during the first 5 years of the “Agreement,” of $41,250.00 during the second 5 years and $45,000.00 during the third 5 years, and $48,750.00 for the final 5 year period. In addition it agreed to make certain capital improvements in addition to those already made under the prior agreement. The Operator was required, at its own expense, to provide, operate and maintain the necessary merchandise and cargo handling equipment and such other equipment as may be necessary for the proper operation of the Terminal. The Operator was further required to provide and furnish to waterway users without discrimination or favoritism adequate terminal services including services for loading, unloading or transferring of freight from barge to car, from car to barge, from barge to truck, from truck to barge, and for mooring, shifting and pumping barges. Charges for these services, although set by the “Operator” were, upon protest to the City, subject to a hearing on their reasonableness, and if not settled there, they were then to be submitted to arbitration. Sec. 9 of the Agreement also required that the business to be conducted on the premises was to be that of a public river-rail-truck terminal for the handling of waterborne cargo, storage incidental to the transportation of waterborne cargo or incidental to the development of waterborne commerce, and all other activities that contribute to the development of the Port of St. Louis and terminal distribution operations. This “Agreement” constitutes in my opinion, a franchise because it involves a grant by the sovereign to a corporate entity the exclusive right to operate for a term of years a public wharf and the public services ordinarily evident thereto.

Respondent’s contention that the Agreement of May 1, 1966, is void is based upon that section of Ch. 229, Ordinance 48175 R.C.C. St. Louis, § 292.030, and more particularly that part of the section requiring all contracts entered into by the Board of Public Service on behalf of the City for stevedores or other services for the handling of freight to be let upon competitive bidding to the lowest responsible bidder. The majority opinion acknowledges that the Agreement does not comply with the terms of Ch. 292. Appellants, in their brief and argument, espouse the position that Ch. 292 does not control because the “basic authority” for such leases comes from Article 1, § 1(16) of the City Charter, and admits non-compliance with Ch. 292. Respondent further contends that Ordinance No. 54034, the ordinance approving the Agreement now under attack, was enacted pursuant to the Charter provisions and therefore, whether Ordinance No. 54034 is an outright repeal of Ch. 292 for the purposes of this Agreement or a qualification of Ch. 292 for the purpose of this Agreement, it is neither a repeal nor an amendment to Ch. 292 and that Chapter has no application here. Respondent further argues that Ordinance No. 54034, being later in time and the more specific of the two, controls. In support of this latter contention respondent leans on Laughlin v. For grave, 432 S.W.2d 308 (Mo. banc 1968) so that this Ordinance No. 54034 should be considered an “exception to, or qualification of, the prior general one, . ” The Laughlin case was not a contract problem where the validity of a contract or franchise grant was at issue; rather, it was a case where the question was whether, in a suit for damages in a medical malpractice case, the two year statute of limitations relating to malpractice actions applied or the general statute of limitations was controlling. That case is inappropriate here. Nevertheless, the majority opinion, relying on Ruschenberg v. Southern Electric R. Co., 161 Mo. 70, 61 S.W. 626, 629 (1900), concluded that by enacting Ordinance No. 54034 the Board of Aldermen of the City created an exception to Chapter 292 and the Agreement of May 1, 1966, is therefore valid. Ruschenberg involved an “exception” authorizing a franchise to operate its street cars at a speed not greater than 15 m. p. h. in the area where the plaintiff’s minor child was killed whereas the speed allowed in a prior general ordinance limited the speed of the “cars” to 8 m. p. h. In upholding the 15 m. p. h. speed ordinance, the court identified the issue before it as: “In an ordinance passed by the City in strict compliance with Article 10 of the Charter, and fixing a new rate of speed under new and changed conditions, necessarily in conflict with the old ordinance, fixing eight miles an hour as the maximum speed for horse cars.” The court held that the new franchise ordinance was an “exception,” a special ordinance, to the general ordinance which was meant to apply to “horse cars” whereas the special ordinance was meant to cover cars propelled by electricity; that therefore there was no intention to repeal the general ordinance. No question of the granting of the franchise was raised in Ruschenberg and for that reason I am not of the opinion it should influence the decision reached here.

Ch. 292 of the Revised Code of the City of St. Louis is legislation concerning the supervision and control of Municipal Quays and Warehouses, and a “Quay” is defined in § 292.010 as: “Any structure owned by the City, built on the Mississippi River shore and extending therefrom to deep water, so that boats may lie alongside to receive and discharge freight.” While the Charter authorized the City to lease wharves, it set up no procedure whereby the City might enter into a contract for that purpose; this, the Board of Aldermen did by enacting § 292.-030. There is in the Charter no requirement that a granting of a franchise or a lease of a portion of the City owned wharf be subject to bids and let upon competitive bidding. Nevertheless, the Board of Aider-men in § 292.030 so provided. However, this the Board of Aldermen could properly require. City of Excelsior Springs v. Etten-son, 120 Mo.App. 215, 96 S.W. 701 (1906). The original Agreement between the parties was subject to this section of Chapter 292. Respondent did not choose to exercise its option to continue the operation of the municipal wharf under the terms of that Agreement as it neared the end of the first 5 year term. Rather, in an apparent effort to avoid the requirement that a new Agreement be let on bids and awarded to the “lowest responsible bidder,” the Board of Aldermen, without repealing or amending Ch. 292 enacted Ordinance 54034 and bypassed the bid requirement of § 292.030 by merely stating in Sec. 2 of the “Agreement” that “Notwithstanding the terms and conditions of Ordinance 48175 (Chapter 292), approved February 13, 1957, and notwithstanding the terms and conditions of an agreement between the parties entered into May 1, 1957, and supplement thereto dated February 27, 1962, this Agreement is entered into pursuant to Ordinance . . ” Both parties to this appeal are in agreement that Ordinance 54034 does not constitute a repeal or an amendment to Ch. 292. It is apparent that the purpose of the Board of Aldermen in requiring that the leases for the Quays and Warehouses be submitted to competitive bidding and be let to the lowest responsible bidder was intended to secure free and unrestricted competition among bidders, eliminate fraud and favoritism, and obtain the most remunerative contract for the City while at the same time affording the public enjoying the services afforded by the wharf the least expensive and most efficient operation. There is, in this record, no evidence to support a conclusion that there was any fraud in the enactment of Ordinance 54034; however, the writer fears that approving the avoidance of the requirements of § 292.030 by the mere usage of the term “Notwithstanding” and holding that an “exception” to bid requirements on city contracts, even when bids are not required by the City Charter or State law, sets a dangerous precedent and points the way to abuse.

For the foregoing reasons I would hold Ordinance 54034 void.

1 . § 237.210 RSMo. 1969, V.A.M.S. empowers cities to lease any portion of a city wharf for a term of years.