Defiance Water Co. v. City of Defiance

| U.S. Circuit Court for the District of Northern Ohio | Dec 30, 1898

SEVKRHNS, District Judge.

The conclusion which I reach in this case is that the demurrer should be overruled. There are three principal questions involved in this determination, which are decided as follows:

1. Was it necessary that the city at the time of entering into the contract for water should have had in its treasury, or should have had in course of collection,, the funds necessary to meet the expenditure contemplated by the contract, as provided for by the section of the Ohio statutes in that behalf (being Rev. St. § 2702)? My opinion is that the statute did not apply to the contract in question, and that there is.no objection to the contract by reason of any requirement of the statute referred to. No payment was to become due for a considerable time, a year and a half or more, and the statute does not intend that the money shall be collected and hoarded for the expenses of the city in future years.

2. Was it necessary to the validity of the said contract that it should have been ratified by a vote of the electors, as was required by the act of January 29, 1885, being section 2434 of the Revised Statutes? I think this question must be answered in the negative, my opinion being that the act of May 4, 1885, as amended by the act. of May 12, 1886, relating specially to a certain grade of cities, to which the city of Defiance belongs, must be regarded as having superseded, to the extent of the cities of that grade, the general provisions of the statute of January 29, 1885. The general act prescribed no limitation in regard to the time for which such contract might be made. The special acts of May 4, 1885, and May 12, 1886, limited the time to a term not .exceeding 20 years. The term for which the contract might be made being short, it may well be that the legislature should have thought so much precaution was not necessary as if the time had been for a protracted period. The contract was, in terms, for a period of 30 years; but as its stipulations are to be performed annually, and it is separable by years, I think the contract is valid for 20 years from its date. A somewhat similar question was presented to the supreme; court of the United States in the case of City of Walla Walla v. Walla Walla Water Co., 172 U.S. 1" court="SCOTUS" date_filed="1898-11-14" href="https://app.midpage.ai/document/walla-walla-city-v-walla-walla-water-co-94941?utm_source=webapp" opinion_id="94941">172 U. S. 1, 19 Sup. Ct. 77, where the city relied upon the provisions of a general act which it was contended was by implication carried into the special act which gave the city power, in general terms, to provide itself with water. In my judgment, the reasons for regarding the special act referred to in that case as sufficient to •carry the power without limitation from the general law were not more cogent than they are here."

3. With respect to the question of the jurisdiction of this court sitting in equity, I think there can be no reasonable doubt. The defendants are threatening to carry into effect an ordinance or resolution of the city which is manifestly designed to destroy the efficacy of the contract of August 17, 1887. The authorities upon this subject are collected, and the doctrine stated, in the above-mentioned case of City of Walla Walla v. Walla Walla Water Co. The demurrer will accordingly be overruled, and the defendants be allowed to answer, if they shall so elect.