39 N.J. Eq. 367 | New York Court of Chancery | 1885
The bill is for an injunction. It states that the complainant was incorporated October 25th, 1880, under the act “for the construction, maintenance and operation of water works for the purpose of supplying cities, towns and villages in this state with water,” approved April 21st, 1876, to supply Atlantic City with water; that the city gave the requisite preliminary consent to the incorporation, and that on the next day after the company was incorporated it entered into a contract with the city by which the company agreed to keep, observe and execute all the stipulations and conditions of an ordinance of the city, entitled “An ordinance to provide a supply of water for Atlantic City,” which ordinance was approved October 21st, 1880, and a copy thereof was annexed to the. certificate of incorporation of the complainant ; that in consideration thereof the city covenanted with the complainant that it would' not grant to any other person or persons or body politic or corporate the right to lay water-pipes beneath the surface of the public avenues, streets, lanes or alleys of the city for the purpose of supplying water to the city or the inhabitants thereof; that after making that covenant the city passed another ordinance, supplemental to the before-mentioned one, which the complainant accepted and agreed by written agreement to observe, keep and perform all the stipulations, provisions and conditions contained in the two ordinances; that the complainant, on the faith of those agreements between it and the city and the before-mentioned covenant by the city, constructed
The city council was empowered by the charter to pass such ordinances as they should judge proper for (among other things) providing a supply of water for the city. P. L. of 1866 p. 'SIS. To this end 'it passed the ordinances mentioned in the bill and entered into the before-mentioned contract with the complainant, and thus, so far as appears and as is alleged in the bill, not only provided for but actually secured and obtained such supply.
The before-mentioned act “ for the construction, maintenance and operation of water works for the purpose of supplying cities, towns and villages of this state with -water” (Rev. p. 1365) provides that any number of persons, not less than seven, a majority of whom shall reside in this state, may form a company for the purpose of Constructing, maintaining and operating water works in any city, town or village in this state having a population of not more than fifteen thousand and not less than two thousand inhabitants, and for the purpose of supplying such city, town or village and the inhabitants thereof, with water; that such persons desirous of forming a company for such purpose shall make, sign and acknowledge a certificate stating the corporate name adopted by the company, the amount of capital stock, the term of existence of the company, the number of directors, and the names of those who shall manage the affairs of the company for the first year, or until their successors are elected and qualified, and the name of the city, town or village
The before-mentioned ordinance of October 21st, 1880, granted to John W. Moffly, Walter Wood, and their associates, or such company as they might form under the laws of this state, permission to lay pipes beneath the surface of the avenues, streets, lanes and alleys of the city upon condition that the pipes to be laid should at all times be sufficient to furnish the city and all the inhabitants thereof, and all the visitors thereto, with a continuous and uninterrupted supply of water of a quality and quantity sufficient to meet all public and private requirements; and it declared of what character and quality the pipes should be; that nothing but pure, fresh water should be conducted through the pipes; that the water should come from artesian wells, but if the company should fail to obtain it from such sources, it
The provision for forfeiture thus alluded to is that in case the-company shall neglect or fail to comply with the provisions of that ordinance for thirty days after notice given to it by the city council (reasonable time to be allowed for repairing any damages caused to the works by unforeseen accidents), then all the provisions of that ordinance shall cease, terminate and become void without further notice. The amendatory or supplementary ordinance appears to have been designed for the purpose of directly
The city having already executed the power of furnishing a supply of-water, and being abundantly supplied, an attempt on its part, in violation of its contract, to create such competition, could not be justified on the ground that it is a further exercise of that power. It is noticeable that not only do the ordinances provide for a supply of water, but the original one is entitled “An ordinance to provide a supply of water for Atlantic City.” The city must be regarded as having executed the power so long as the complainant performs its obligations. As matters now stand, the city has provided for and obtained a supply, and it has, therefore, now no power to make any further provision on that head, for there is no room for any; the city is already supplied. Assuming, as we must on the argument of this motion, that the statements of the bill are true, there is no reason or excuse for the proposed breach of faith. The only excuse offered is that the city is not bound by the covenant, because it was ultra vires. The ordinances were a contract on the part of the city with the company. The covenant itself is evidence of the contract. Leaving the covenant entirely out of view, and considering the subject in the light of the contract merely, if it be admitted that the company has hitherto performed, and is still prepared and proposes to continue to perform its part of the agreement, it is entitled to protection. It has made very large expenditures on the faith of the agreement that it should have the privilege of supplying the city with water, and it would manifestly be highly unjust and inequitable to hold that the city has the power and may exercise it, of diminishing, if not of destroying, at will, the value of the company’s investments made on the faith of the