214 F. 121 | D. Mont. | 1914
In its present aspect this is a suit to compel specific performance of a contract for a municipal water supply, to enforce a renewal clause. The defenses are invalidity of the contract and nonperformance by complainant.
From the evidence it appears that defendant, a city of this state, was incorporated under a special act of the Legislature of date March 10, 1885. Therein were limitations upon the power to create debts and restrictions upon the method of contracting. The first involved authorization by a vote of electors; the second, advertising and awarding to the lowest responsible bidder. In disregard thereof, defendant’s council by ordinance tendered to complainant’s predecessor in interest a franchise for works to supply defendant and its inhabitants with water for an indefinite time, and also therein a contract to supply defendant with fire hydrants and water for 20 years at an annual rental fixed therein, which contract included an option to defendant to purchase the water system at the end of said term at a price to be then determined by commissioners appointed as therein provided, and a promise by defendant that if it did not exercise the option, it would renew the contract for 20 years upon terms to be then mutually agreed upon, with a proviso that the “prices” should not exceed those fixed by ordinance, and that renewal would not “annul” any the operation of the ordinance. Terms and conditions were set out in great detail, providing, amongst other things, that pure and wholesome water should be supplied, that the system should have strength to simultaneously throw a certain number of streams a prescribed height if necessary, and that if at any time the beneficiary failed to comply with any material term, condition, or stipulation of the ordinance, defendant could forfeit rentals, and, such failure continuing for 60 days, unavoidable delays and accidents excepted, could terminate the contract. The ordinance was to take effect upon execution of á contract in accordance with its • terms, conditions, and stipulations. The tender was accepted, and a contract in accordance with and incorporating said ordinance executed. The works or system was constructed, and, although not of the required strength, the defendant commenced paying rentals on April 1, 1887, but declaring the deficiency should be supplied as speedily as practicable. Rentals as fixed by the ordinance and contract were paid to February, 1912. In April, 1893, defendant elected to abandon the said special act and to subject itself to the general laws of the state, and thenceforward and now so continues. Then and until July 1, 1895, said laws contained no limitations and restrictions like those aforesaid of the special act, but on the latter date like restrictions were incorporated therein and continue to this day. The first term of 20 years ran its course. Defendant, of 600 inhabitants in the beginning, grew, and the water system with it. There was more or less continuous failure in the required strength of the system, or to furnish the same
The ordinance that provided for both franchise and contract also provided for corresponding rights and duties. The franchise conferred upon complainant the right and duty to occupy for an indefinite time defendant’s streets with a water system and vend pure and wholesome water to defendant and its inhabitants if they desired to buy. The contract likewise for 20 years to vend such water to defendant obligated to buy it, and also obligated to buy the system at the end of said term, or to renew the contract for a like term.
Here, the fact remains that complainant failed in its most vital obligation, involving the health and well-being of a large community, and is vulnerable to the maxim, “He who comes into equity must come with clean hands.”
It is not entitled to specific performance, and decree will be entered for defendant.