City of Ashland v. Wheeler

88 Wis. 607 | Wis. | 1894

PinNet, J.

1. The franchise of the Ashland Water Company to supply the inhabitants of the unincorporated village of Ashland with water, upon the terms stipulated in the original ordinance and the several ordinances amenda-tory thereof, was evidently granted by the supervisors of the town of Ashland, acting apparently under the statutes (secs. 819», 892,1780, S. & B. Ann. Stats.) giving, as therein provided, to town boards of towns containing one or more unincorporated villages having each a population of not less than 1,000 inhabitants, certain powers, as applicable thereto, conferred upon village boards by the provisions of ch. 40, K. S., and acts amendatory thereof. No proof of previous authority from the electors of the town was shown, and it is doubtful whether the town ordinances were upon sufficient authority. Dullanty v. Vaughn, 77 Wis. 38. It appears that, the contract made or franchise granted in the first instance, or assumed to be, was by the town board of the town of Ashland to Yaughn, Flagler, and Linnen; and from an ordinance in evidence, passed by the town board October 6, 1885, it appears that the Ashland Water Company was the assignee of the franchise and contracts made with them, and that said assignment was thereby ratified and confirmed, and that the water company was ordered to make certain extensions of its mains, without any unnecessary delay, and erect certain hydrants at various points in the village. Other like extensions and hydrants were ordered by an ordinance, October 6, 1886; and these ordinances provide for the payment of a rental for the hydrants by taxation.

After the city was incorporated in April, 1887 (ch. 127, Laws of 1887), the common council passed the ordinance under which the water company charge and exact the rates complained of, the more material portions of which are stated above. It was prefaced by the statement that, “ it being expedient and necessary to provide for the supply of water to the city of Ashland and its inhabitants for fire protection and wholesome water for domestic purposes, and the town of Ashland having heretofore caused such supply to be furnished under the five following ordinances, which are made a part hereof,” by express reference, to wit, the ordinances referred to are incorporated in the city ordinance in haeo verba, and it concludes with five other sections, the material parts of which are contained in the foregoing statement. Whatever doubt may exist whether the provisions of this ordinance were within the authority of the general statutes cited, there can, we think, be no question but that they became valid as a part of the city ordinance of August 2, 1887, and were within the power and authority of the common council. The franchise and contracts described therein, upon its passage and publication, became valid and binding as between the city and the water company.

It is enough that the franchise and contract between these parties is evidenced by matter of record, or by any writing or writings amounting to a written contract. It is not necessary that the franchise and contract should be granted or created by ordinance. A written resolution and acceptance are sufficient. The statute (S. & B. Ann. Stats, sec. 1780) expressly provides that the corporation “may make and enter into any contract with such city or village to supply such city or village with water for fire and other purposes upon such terms and conditions as may be agreed upon; . . . and any such city or village may, by contract duly executed by the proper authorities, acquire the right to use the water, . . . upon such terms and conditions as may be agreed upon by such corporation and the authorities of such city or village.” The franchise is a special privilege, not belonging as of common right to the people at large. It is an executed contract on the part of the state, the consideration for which is the benefit which the public will derive from its use and exercise. The common council is authorized by the statute to grant such franchises, and they are as much the franchises of the corporation as if granted by an express statute, for the common council exercises in granting* them a delegated authority, and what it does within that power is done by the legislature through its agency. The acceptance of the conditions of the grant by the water company beyond doubt constituted a valid contract between it and the city. State ex rel. Att'y Gen. v. Madison St. R. Co. 72 Wis. 620; Bank of Augusta v. Earle, 13 Pet. 519; People v. A. & V. R. Co. 24 N. Y. 261.

2. There is no provision in the statute delegating to the common council of the city the power to alter or repeal a grant of such franchise, though, through the exercise by the legislature of the reserved power in sec. 1, art. XI, of the constitution, it might alter or repeal it at will. In the absence of an express delegation to the common council, we think none can be implied., It was therefore beyond the power of the common council to alter, repeal, or impair in the least the franchise or contract in question, and" the ordinance upon which this prosecution is founded is therefore clearly void.

It was, however, insisted that such power had been conferred on the council by the amended charter of the city (Laws of 1889, ch. 27, subch. 11), which provides that “ whenever the waterworks shall be owned by the city, the same shall be operated under the direction of the board of public works;” and that “the common council shall have power to legislate on all matters with reference to the construction, operation, management, and protection of waterworks for the city, not contravening the provisions of this act, or the constitution or laws of this state, or contracts already made,” etc. This act evidently is applicable only in case the city builds waterworks of its own, or acquires the works of the water company, as it had reserved the right to do, and clearly indicates that its power of legislation could in no event be exercised to the prejudice of existing contracts, meaning, no doubt, the contracts here in question.

3. It was argued that as the vote of Schottmiller as a member of the common council, and who held two shares of stock of the water company, was required to pass the ordinance, it was therefore void, under the charter then in force (Laws 1887, ch. 127, subch. 14, sec. 3), which provides that “no member of the common council shall be a party to or interested in any job or contract with the city, and any contract with' the city in which any such member may be so interested shall be null and void; and in case any money shall have been paid on any such contract, the city may sue for and recover the amount so paid from the parties to such contract, and from members of the common council interested in the same,” — and, further, that-the amount of annual water rentals which the city stipulated by the ordinance to pay to the water company in semi-annual payments during the term for which the franchise was granted constituted a debt against the city in jprmenU, and was in excess of five per cent, of the taxable property of the city at the then last valuation thereof; and that therefore the ordinance and contract contained in it were prohibited by sec. 3, art. XI, of the constitution. It is a general rule that the validity of the grant of a franchise cannot be questioned collaterally or in any other way than upon proceedings by quo warranto for alleged usurpation of such franchise at the suit of the state. Ang. & A. Corp. §§ 731, 739, 742, 747; Booth, St. Ry. Law, § 44; In re New York El. R. Co. 3 Abb. N. C. 401. It would be intolerable if, upon any litigation between the city and the water company in relation to their respective rights or duties under the ordinance in furnishing water, the water company could be put to strict proof of the existence of its franchise, and so, too, in respect to the rights and franchise of any corporation.

4. The objections of the city to the validity of the franchise and contract, if established, would necessarily prove fatal to the validity of the ordinance, and to the present prosecution under it; for it is manifest that if the franchise and contract contained in the ordinance of August 2,1887, are, as the plaintiff contends, utterly null and void, the common council of the city of Ashland had no power whatever to pass the ordinance of August 22,1893, and no power to legislate in respect to the rates which the water company, through the defendant, might charge for furnishing water, for in that respect the city and the water company would be as utter strangers to each other, neither owing any duty or obligation to the other.

For these reasons the circuit court erred in ruling that the ordinance last mentioned -was valid, and that the defendant might be convicted under it.

By the Court.— The judgment of the circuit court is reversed, and the cause remanded with directions to dismiss the complaint.