## Facts

- Cooke County Electric Cooperative Association provided electric service in the area beginning in 1938.
- The Town of Lindsay incorporated in 1959 and, in 1960, enacted a proposed 50-year franchise ordinance prepared by the cooperative.
- The ordinance stated it would take effect only after “passage, approval and acceptance” and required the cooperative to file a written acceptance within 30 days of passage.
- The ordinance required annual payment of 2% of gross receipts from electric sales within the town limits.
- Shortly after enactment, the cooperative sent the town a $12.45 check described as payment of 2% gross receipts; the town deposited it.
- The cooperative’s board later approved the franchise and instructed counsel to file a formal written acceptance, but no evidence showed that a written acceptance was ever filed with the town.
- The town later repealed the ordinance and, after the statutory period for continued operation without a franchise, demanded removal of the cooperative’s lines and equipment from streets and alleys; the cooperative refused.
- The town sued for injunctive relief; a jury found the cooperative accepted within 30 days and that the gross-receipts payment was intended as acceptance, and judgment was entered for the cooperative.

## Issues

1. Whether a franchise ordinance that requires filed written acceptance within a specified time creates a binding franchise contract absent proof of that written acceptance.
2. Whether payment and acceptance of a gross-receipts fee can substitute for the ordinance’s prescribed method of acceptance.

## Decision

- The Supreme Court of Texas reversed the lower courts and rendered judgment for the Town.
- The court held the cooperative did not accept the ordinance in the manner required because there was no evidence of a written acceptance filed within 30 days.
- The court held the gross-receipts payment did not satisfy the ordinance’s acceptance condition and therefore no franchise contract came into existence.

## Legal Principles

- Where an offer prescribes the time and manner of acceptance, those terms must ordinarily be complied with to form a contract.
- A municipal franchise ordinance that conditions effectiveness on filed written acceptance does not become binding without compliance with that condition precedent.
- Conduct consistent with performance (such as paying a required fee) does not create a contract when the offer unambiguously requires a different, specific mode of acceptance.

## Conclusion

Because the ordinance required a timely filed written acceptance as a condition of effectiveness and the cooperative did not prove it filed such an acceptance, no franchise contract existed, and the town was entitled to relief consistent with the absence of a valid franchise.


Town of Lindsay v. Cooke Cnty. Elec. Coop. Ass’n, 502 S.W.2d 117 (Tex. 1973)