Chapman Valve Manufacturing Co. v. Oconto Water Co.

89 Wis. 264 | Wis. | 1895

NbwMAN, J.

The instant case is an action for a statutory lien upon the entire waterworks plant of the defendant, or, if that is denied, upon the valves furnished by the plaintiff, as machinery which may be removed.

In Wilkinson v. Hoffman, 61 Wis. 637, this court held, on grounds of public policy and convenience, that a mechanic’s lien was not given by sec. 3314, R. S., against machinery placed in a building which was a part of a waterworks plant owned by a city and held for public use. It was said that: “ The public inconvenience which wpuld result from having such machinery removed is too obvious and grave to require any discussion. The comfort, health, safety, and property of the citizens would be greatly endangered by allowing the facilities for procuring water to be suspended, even for a short period. In view of the serious consequences which would result by allowing the lien to attach to machinery thus used, and which more than countervails any private advantage, we are inclined to hold that the provision does not apply in the case before us.” And so the court held, “ on grounds of public necessity and convenience,” that a lien was not given by the statute on property so held for public use. '

The city of Oconto has provided for the supply of the water necessary for its protection against fire, and for all the uses of its citizens, by a contract with the defendant, which is a corporation specially organized for that purpose, for the term of thirty years. The defendant’s system of waterworks was constructed under an ordinance of the city, which directed, in considerable detail, the manner of its construction, extent and capacity of the plant, and the manner of its operation. It also gave it a franchise to construct and operate its works for thirty years. After the plant was completed, the city accepted it by an ordinance which declared it to be constructed in accordance with the ordinance and the franchise conferred. In this manner the city provided itself with a system of waterworks for the protection and convenience of its inhabitants. It became and was the waterworks of the city of Oconto. It is manifest that the inconvenience and danger which must result from a stoppage of the operation of the waterworks, or from any interference with their use and operation, to the city and to its inhabitants, would be equally grave and important whether the system was owned and operated by the city or whether the city owned only the right to have it operated for its benefit and for the benefit and protection of its citizens. The effect of enforcing a lien upon the valves, as machinery Avhich might be removed, would be to dismantle the plant and stop its operation for a time at least, and to deprive the city and its inhabitants of its protection and use in either case. So the case comes within the rule of Wilkinson v. Hoffman, 61 Wis. 637, and the lien upon the valves must be denied.

To extend the lien over the entire plant would bring a like .mischief and inconvenience. Tbe 'lien could, by tbe terms of tbe statute, extend only to and include tbe entire plant, vitb all tbe interest which the defendant has in tbe land on which tbe plant is situated. Tbe statute, in terms, gives no more. Tbe defendant has an oral contract with tbe city for tbe purchase of tbe lots on which its piunping works stand, and tbe franchise to lay its main pipes and hydrants in tbe streets. It has no other or further interest in tbe land. Perhaps this is a sufficient interest to support a lien, in an ordinary case, upon tbe plant, with tbe interest in tbe land. But in terms tbe statute gives no more. It gives no lien upon or right to sell tbe franchise to operate tbe works. Whether tbe statute shall be extended by construction to •cases not within its express terms may depend somewhat on its subject matter as related to questions of public policy and convenience. Tbe effects and consequences which may result from an enlarged construction of tbe statute may be •considered in determining its proper construction. If it shall be held that tbe plaintiff has a lien which covers tbe plant, then tbe plant may be sold to satisfy tbe ben. It will then come to a purchaser who has no franchise to operate it, for tbe statute does not give a ben upon tbe franchise. Nor does it provide that tbe franchise sbab fobow tbe plant on sale under a ben judgment. Nor does tbe franchise follow tbe plant by force of tbe rule that tbe incipient follows its principal. If that maxim bas any application, it should be considered that tbe franchise is tbe principal thing. AU other rights spring from tbe franchise. Tbe franchise is a grant in gross of an incorporeal hereditament, and is not appurtenant to any particular land or property. Fond du Lac Water Co. v. Fond du Lac, 82 Wis. 322. It would not follow the plant on sale under a ben judgment. It is neither subject to tbe ben, by provision of tbe statute, nor fobows tbe plant on sale as an incident fobows its principal. It is not appurtenant to the plant. Nor can tbe plant be sold separately from the franchise to operate it. The franchises and corporate rights of a company, and the-means vested in them, which are necessary to the existence and maintenance of the object for which they were created,, are incapable of being granted away or transferred by any act of the company itself, or by any adverse process against' it, — unless it is authorized by a statute. Yellow River Imp. Co. v. Wood Co. 81 Wis. 554; Foster & Co. v. Fowler & Co. 60 Pa. St. 27; 8 Am. & Eng. Ency. of Law, 634, and cases cited in notes. To sell the plant to a purchaser who had no franchise to operate it would work all the public mischief and inconvenience which its total destruction would cause. Besides, a sale of the plant separate from the franchise would be a delusive remedy to the plaintiff. The plant without the franchise is practically without value, a consideration which shows that that cannot be the plaintiff’s remedy. Nor has a court of equity power to extend the lien, over rights not made subject to it by the statute. So it must be held that no mechanic’s lien is given by the statute-upon a waterworks plant which a city has provided for the-protection and convenience of its citizens by a contract with a corporation organized for that purpose.

The court has not overlooked nor failed to appreciate the-force of the.learned and industrious opinion upon these same questions of Mr. Justice JjluKINS in the United States circuit court for the Eastern district of Wisconsin against the same defendant (National F. & P. Works v. Oconto Water Co. 52 Fed. Rep. 43), and affirmed by the circuit court of appeals (Oconto Water Co. v. Nat. F. & P. Works, 7 C. C. A. 603, 59 Fed. Rep. 19). While this court entertains the highest respect for the opinions of those learned courts, and for the distinguished ability of the judges who have pronounced and affirmed that decision, it has yet felt constrained to a different judgment by the force of its former decisions and by the logic of the situation. It is considered that the view it has-taken in this opinion is in accord with the weight of authority and of the better reason.

By the Count.— The judgment of the circuit court is affirmed.

Upon a motion for a rehearing counsel for the appellant contended, inter alia, that the sale of the waterworks plant under a mechanic’s hen would carry with it the franchise to operate it. This is demonstrated by the authorities cited in. the opinion of Judge JeNKINS in 52 Fed. Rep. 43. The franchise is not the principal thing to which everything else is an incident. Farmers' L. & T. Co. v. Comm. Bank, 11 Wis. 207, 214. No case can be found in which it was so held as the point in the case. But the question whether the property or the franchise of a corporation is the principal thing is not at all the test of whether a mechanic’s lien can be enforced for the furnishing of material to the corporation. The test is whether, upon a sale of the property of the corporation against which a judgment upon foreclosure of the lien has been entered, the franchise to use and operate such property would pass to the purchaser as an incident to» such sale. The franchise in question is such a right as “ constitutes property within the usual and common signification of that word.” Mumma v. Potomac Co. 8 Pet. 281-285; People v. O'Brien, 111 N. Y. 2; Sellers v. Union L. Co. 39 Wis. 525; Conway v. Taylor's Ex'r, 1 Black, 603-632. The “ franchises ” referred to in the opinion in this case as being “ incapable of being granted away or transferred by any act of the company itself or by any adverse process,” etc., are the franchises of being a corporation and not the franchises which the company possesses to operate its plant. This is made clear by the authorities cited. Tha> franchise to exist is entirely distinct from the franchise to construct and operate. The one is incapable of being sold by voluntary or involuntary means without express legislative au-tbority. Tbe other does not require legislative sanction to be either sold or mortgaged or seized and sold by adverse process. The one does not pass as incident or appurtenant to the plant or corporate property; the other does. Memphis & L. R. R. Co. v. Comm'rs, 112 U. S. 609-619; Wright v. M. & St. P. R. Co. 25 Wis. 46; Joy v. J. & M. P. R. Co. 11 Mich. 156; 1 Beach, Priv. Corp. § 362; Ragan v. Aiken, 9 Lea, 609; Neff v. Wolf R. B. Co. 50 Wis. 585; New Orleans, S. F. & L. R. Co. v. Delamore, 114 U. S. 501; Morgan v. Louisiana, 93 id. 217; Lawrence v. M. L. & T. R. & S. Co. 39 La. Ann. 427; Monongahela Nav. Co. v. U. S. 148 U. S. 312; McNeal P. & F. Co. v. Howland, 111 N. C. 615; Wilmington R. R. v. Reid, 13 Wall. 264; Syracuse W. Co. v. Syracuse, 116 N. Y. 167, 182; Gloninger v. P. & C. R. Co. 139 Pa. St. 13; Carpenter v. Black Hawk G. M. Co. 65 N. Y. 43; Lord v. Yonkers F. Gas Co. 99 id. 547; Butler v. Rahm, 46 Md. 541, 547; Meyer v. Johnston, 53 Ala. 237; Metz v. B. C. & P. R. Co. 58 N. Y. 61; Stewart v. Hargrove, 23 Ala. 429; Bank of Middlebury v. Edgerton, 30 Vt. 182, 190; Ludlow v. C. L. R. Co. 1 Flippin, 25; Coe v. C., P. & I. R. Co. 10 Ohio St. 372; Pullan v. C. & C. A. L. R. Co. 4 Biss. 35; Charles River Bridge v. Warren Bridge, 11 Pet. 630. By reference to the laws of this state, cited in the opinion in Nat. F. & P. Works v. Oconto W. Co. 52 Fed. Rep. 54, 55, it appears beyond question that the legislature has in every way possible authorized and sanctioned the right to sell, mortgage, or otherwise dispose of the franchises of a corporation. Whether this means both classes of franchises or not is immaterial. If by such legislation the defendant could by voluntary act dispose of its franchise to build, maintain, and operate the water plant, it is equally certain that such disposition and sale of the franchise can be had by involuntary alienation at the suit of a creditor. That this company had authority, under' the laws of this state, to mortgage its franchise to operate its plant, even separate from its other property, has been, adjudicated in Andrews v. Nat. F. & P. Works, 61 Fed. Rep. 782. A court of equity, without express statutory authority, could place the management of a corporation in the hands of a receiver,, who would have a right to operate its property for the benefit of the public. Louisville Water Co. v. Hamilton, 81 Ky. 517. And under a voluntary assignment the franchise to operate the property would pass to the assignee, with like effect as to a receiver. Garden City B. & T. Co. v. Geilfuss, 86 Wis. 612. "Why, then, would not such franchise pass to the purchaser of the property upon a sale under a judgment for a mechanic’s lien? The city of Oconto, by its ordinance, expressly recognized the right of the company to dispose of the franchise to construct and operate the plant, by authorizing the company, “ its successors and assigns,” to construct, operate, and maintain the waterworks; and the city also reserved the right to purchase the waterworks, together with its “ rights, privileges, and franchises.” Sec. 3229, R. S., providing that the franchises of “ any turnpike or other corporation organized to receive toll ” may be taken on execution, is broad enough to cover the defendant corporation. McNeal F. & P. Co. v. Howland, 111 N. C. 615; McKee v. G. R. & R. L. St. R. Co. 41 Mich. 274; Wis. Tel. Co. v. Oshkosh, 62 Wis. 32.

The motion was denied February 5, 1895.