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Acquisition and Ownership

Municipal corporations are political subdivisions of states, created as convenient agencies for exercising governmental powers entrusted upon them.  For the purpose of executing the entrusted powers properly and efficiently, municipal corporations are given the power to acquire, hold, and manage personal and real property.

No contract is created for vesting property in municipal corporations.  Thus, a state is empowered to modify or withdraw the power of a municipal corporation to acquire property, take property without compensation, hold the property itself, vest the property in other agencies, expand territorial area, repeal the charter, or even destroy a corporation[i].

Municipal corporations possess all the powers expressly provided in the respective state constitution or laws.  Usually, municipal corporations are expressly authorized to acquire and hold real and personal property for corporate purposes.  A municipality can acquire by lease and sublet for any term, from the U.S. or other governmental agency real property and maintain or improve it for the use and purpose of a public park or a like purpose[ii].

In purchasing land for a town, a municipality is not confined to present or immediate needs.  The municipality can make reasonable provision for future requirements related to the acquired property[iii].

Some states empower the mayor or aldermen to enact and execute all such acts necessary and convenient for the full and entire acceptance, execution, and prosecution of devises, bequests, and trusts.  A municipality is empowered to carry into effect the desire of the testator.  For that purpose, a municipality can enact necessary laws[iv].

Moreover, a municipality is permitted to accept a conditional gift.  “Any local unit is authorized and empowered to accept bequests, legacies, and gifts made to it and is empowered to utilize such bequests, legacies, and gifts in the manner set forth in the conditions of the bequest, legacy or gift, provided, however, that such bequest, legacy, or gift shall not be put to any use which is inconsistent with the laws of this State and of the U.S”[v].

Where a corporation has the legal capacity to take real or personal estate, the corporation can hold it upon trust, in the same manner and to the same extent as a private person.  However, when a trust is inconsistent with the proper purposes for which it was created, a new trustee is required to be substituted by the proper court to enforce the objects of the trust[vi].

A municipal corporation can acquire property only for municipal or public purposes.  A public purpose includes maintaining off-street parking facilities, developing a state prison, operating a municipal landfill, owning and leasing a miniature golf course, and maintaining a sewage system.  A municipal purpose includes construction of a building for officers of a municipal corporation and for keeping records.

In acquiring property for public purposes, a municipality is not authorized to pay more than the property’s reasonable value.

Additionally, each state, subject to constitutional limitations, holds ownership and control of the beds of all navigable tidewaters within its limits.   The soil under navigable waters is not granted to the U.S., but is reserved to the states respectively.  A state holds the title to and the right of control of soil under tidewaters.  Lands under navigable waters are frequently granted by the state to municipal corporations.

A municipality, acting in its proprietary capacity, is authorized to rent or lease real estate for any valid and sufficient consideration within the objects of its incorporation[vii].

When an acquired property is no longer used for public purpose, the land reverts back to the fee owner[viii].  In order for a public street dedicated to public use pursuant to statute to constitute abandonment, the long continuing non-use must be accompanied by some affirmative or unequivocal acts of the municipality.  The acts must indicate an intention to abandon.  An estoppel arises where there is long-continued nonuse by the municipality, along with possession by private parties in good faith and in the belief that its use as a street has been abandoned.  When a private person makes valuable improvements yo an abandoned property without objection from the municipality, estoppel arises.  The reason is that reclaiming the land would result in great damage to the person in possession[ix].

[i] Board of Education v. Stoddard, 49 N.Y.S.2d 38, 40 (N.Y. Sup. Ct. 1944).

[ii] A.R.S. § 11-932.

[iii] Hamden v. New Haven, 91 Conn. 589 (Conn. 1917).

[iv] Vidal v. Phila., 43 U.S. 127, 190 (U.S. 1844).

[v] N.J. Stat. § 40A:5-29.

[vi] Willis v. Alvey, 30 Tex. Civ. App. 96, 99 (Tex. Civ. App. 1902).

[vii] Adams v. Rome, 59 Ga. 765, 769 (Ga. 1877).

[viii] Buck v. Winona, 271 Minn. 145, 151 (Minn. 1965).

[ix] Newport v. Taylor, 225 Minn. 299, 305 (Minn. 1948).

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