118 Iowa 234 | Iowa | 1902
The plaintiff alleges that it is a corporation organized for pecuniary profit under the laws of this state; that on February 19, 1875, the defendant, by its council, adopted an ordinance granting to the plaintiff the exclusive privilege for twenty-five years, and an equal right thereafter with others, of furnishing the city with a water supply; that by its terms said ordinance was made a contract between plaintiff and defendant, and was not subject to change or amendment without mutual consent; that, under the statute then existing, the city had no right or power to fix or regulate the rates to be charged by the water company to private consumers; that on March 8,1876, the legislature of the state passed an act legalizing the ordinance aforesaid, and declaring it binding and effective- for all the purposes therein expressed; that, proceeding under its said contract, plaintiff constructed and
The arguments of counsel are largely devoted to the following questions: (1) Was the right which the plaintiff acquired under the ordinance of 1875 to furnish the city water supply a franchise? (2) Did such right or franchise expire at the termination of the twenty-five year period named in the ordinance? (3) Does the legalizing act of March 8,1876, give plaintiff any other or greater right than was originally conferred by the ordinance? (4) May the defendant in this proceeding deny the present existence of such right or franchise in the plaintiff? (5) Has the city any power to regulate the rates which may be levied by the water company? (6) Are the rates prescribed by the ordinance of 1900 reasonable? These and minor questions which naturally cluster around them we will now proceed to consider so far as it is necessary to a disposition of defendant’s appeal.
The plaintiff sets up the grant as the basis of its demand, and the right to allege in answer that such grant has expired is as pertinent as the right 'to plead payment to an action, upon a promissory note. In City of Zanesville v. Zanesville Gaslight Co., 47 Ohio St. 1 (23 N. E. Rep. 55), — a case very much in point in the facts involved, —it is said: “It is open at all times to a person against whom a corporation may claim the right to exercise a power to call the power in question, and to require the company to show the existence of the power by deriving it either from the plain terms of its charter or the statute under which it is organized.” See, also, 4 Thompson, Corporation, section 5340; Louisville Trust Co. v. City of Cincinnati, 22 C. C. A. 334 (76 Fed. 296). To hold otherwise is, in effect, to say that in an action brought by a corporation against a city, based upon an alleged franchise,
It is, proper here to say that in reaching these conclusions, we have not attempted any estimate of the “going ■value” of the waterworks as a distinct and severable item ■in the calculation. By “going value” we understand is meant that value which arises from having an established .“going” business. While not the exact equivalent of “good will,” as applied to ordinary business, it is of a somewhat similar nature, and attaches to the business, rather than to the property employed in such business. The fact that the business is established is, of course, a material fact in ascertaining the value of the plant, and especially is this true where the property is being estimated for the purposes of sale or condemnation; but as
The decree of the district court is reversed.