Ogden City v. Bear Lake & River Water-Works & Irrigation Co.
52 P. 697
Utah
1898
Check Treatment

Lead Opinion

Zane, C. J.

(having stated the case, delivered the opinion of the court):

The respondent insists that the order appointing the receiver is not a final judgment, within the meaning of section 9, art. 8, of the constitution of this state. That section declares that “from all final judgments of the district court there shall be a right of appeal to the supreme court.” The Bear River Irrigation & Ogden WaterWorks Company had been in the actual possession of the water system, and the business transferred to the receiver by the order, more than seven years before the order appointing the receiver and depriving it of its possession of the property and the control of the business was made. The order determined finally the rights of the parties to the possession of the property in dispute, and the control of the business, during the pendency of the suit; and the right to collect all demands due, and to pay all liabilities incurred, was also given to the receiver during that time. When the court shall finally determine the rights of the parties with respect to the property and business, and order them turned over to the one adjudged to be entitled, the order appointing the receiver will be recognized as binding. It will not be modified, added to, or changed. Before that time the receiver may collect and add to the fund, pay out a portion of it, and he will then deliver and transmit whatever remains to the person found to be entitled. The order, when made, was final as to the appointment of the receiver. No further action of the court was contemplated with respect to it. Errors, if any, in the order, can only be reviewed on an appeal from it. It would be idle to review such errors after the *450duties of tbe receiver shall have been terminated, — after the order shall have spent its force. Any injury to the party entitled to the benefit of the possession and the business during the litigation will have been sustained before that time, and errors, if any, in appointing the receiver, will have accomplished their effects. By it, important rights were taken from the defendant the Bear River Irrigation & Ogden Water-Works Company, for the injurious consequences of which, if erroneous, there can be no redress without appeal from the order. In determining whether the order is appealable, we must consider its effects upon the rights of the parties, rather than the stage of the litigation at which it was made. While some of the authorities bearing upon the question cannot be reconciled, we are disposed to follow those supporting an appeal in cases like this. They appear to be supported by the better reasons. Barry v. Briggs, 22 Mich. 200; Brown v. Ring, 77 Mich. 159; Lewis v. Campau, 14 Mich. 458.

The appellants insist that the order appointing the receiver, appealed from, is erroneous; that the court was not authorized, under the pleadings and the evidence, to make the order. They rely upon the contract of August 6, 1889, between the city of Ogden and John R. Both well, and the transfers by which it came to the Bear River Irrigation & Ogden Water-Works Company, and the resolutions of the city council, of October 4, 1890, purporting to turn over and transfer to the Bear Lake & River WaterWorks Company the Ogden City water-works system. They insist that thereby the latter company obtained the title to the Ogden City water-works system, and the right to furnish water to the city and its inhabitants, and the use of its streets for water pipes, and a lease for the full time that Bothwell or his assigns should furnish water *451through the water-works system for municipal purposes; •while the respondent claims that the water-works system and the water, the right to which is in, dispute, was dedicated to the use of the public, and that the city authorities could not transfer it to Bothwell, or to the defendants, or either or any of them, without the express authority of a legislative enactment, and that, no such authority being in existence, the transfer relied upon by the defendants was absolutely void. If the defendants are right in their contention, the plaintiff has no right to the water system or water right in dispute, or to the control of the business, and the appointment of the receiver must be held to be erroneous. On the contrary, if the plaintiff is right in its contention, or we can say from the pleadings and evidence upon which the receiver was appointed that the-plaintiff is probably right in its contention, and that the property or proceeds of the business was in danger of being materially injured, or any considerable part of it was in danger of being lost if left in the hands of the defendant the Bear Biver Irrigation & Ogden WaterWorks Company, during the pendency of this suit, we must hold that the appointment of the receiver was not erroneous.

As to the first proposition in the order we will consider them, was the city of Ogden authorized to enter into a contract transferring its rights to the waters and system in question to the defendants, or either of them? Ogden City was a public corporation, and its authority was limited to such powers as were expressly granted by statute, and such as might be necessary to those expressly given. Undoubtedly, water distributed to a city and its inhabitants is devoted to a public use, and the entire system, whether consisting of reservoirs, conduits, pipes, or other means used to accomplish the delivery, is also *452dedicated to tbe same use. The charter of Ogden City contained a provision authorizing it to “purchase, receive, hold, sell, lease, convey and dispose of property real and personal for the benéfit of the city.” No authority is expressly or by necessary, implication given to convéj-, transfer, or lease to a private corporation, or other person, property used by the public,- — dedicated to a public use. The control and management of propertj' dedicated to the use of the people of a city is given for their benefit, not for the individual benefit of the public authorities. .V public corporation is not a legal entity or person, ’whose interests can be considered separate and apart from its people. It is but an instrumentality created and perpetuated for their benefit. Its officers, as such, are nothing-more than agents of the public. They must act within the scope of their authority. Their acts outside are perfectly impotent, from a legal standpoint. Their authority and control of the property and rights of the corporation used by the people are not given them for the purpose of being transferred to private corporations, or any one else, to enable them in that way to deprive the public, of its use; nor can the city authorities divest the city of :ts rights to it, and in that way rid themselves of the management and control of it for the city and its inhabitants. They cannot deprive the public of the benefit of property rights or powers affected with a public use by conveying or leasing it to others, unless their charter specially authorizes it, though such other corporation or person may undertake to give the public the use of it for compensation deemed reasonable. Such officers are selected by the people, to whom they are responsible, and they may be removed and superseded by others. While the use of public property is controlled and managed by public officers, whatever compensation is received goes *453into the public treasury, and, if the compensation exceeds the actual cost, the public gets the benefit of the surplus or net income. When property whose use is devoted to the public is conveyed or leased to private corporations, though a contract may require its use to be given to the public for a reasonable' remuneration, the public, to a great extent, loses its control over it, and any net income realized goes into the hands and pockets of private parties. In fact, such parties cannot give the use of their property to the public for the actual cost of it, and the actual expense of the business, as -in this case. They must have profits, and it is to the interest of such parties to make the profits or net income as large as public officials will consent to make it. The people usually get fleeced when the city places its water-works in the hands of private parties. Public-spirited men are not at all times free from the undue influence of self-interest. Their disposition to favor the public is not equal to their inclinations to favor themselves. Such are the leanings of human nature, even when engaged in public-spirited projects. A city sometimes has on hand personal and real property not devoted to the use of the public; fire engines, horses or other personal property may become unsuited to the use for which they were designed, and be replaced and cease to be used. Public buildings may become unfit for the public use, and for sufficient reasons the city máy not wish to build on the same lot; and such buildings, and the lots upon which they stand may be no longer used by the public. The city from time to time may have other classes of property that has ceased to be used, or is not used by the public. All such property of a municipal corporation, not devoted to the public use, may be sold or leased under the general authority to sell or lease, as the public wel*454fare may demand. Such property may be converted into money or other things, and in that form devoted to the use of the public. But property devoted to a public use cannot be sold or leased without special statutory authority. It follows that the writing purporting to grant to John B. Bothwell the right of Ogden City to furnish water to it and its inhabitants, and to lease to him its water rights, as long as he or his assigns should furnish water to it, and the resolution of its city council purporting to turn over to the Bear Lake & Biver Water-Works Company the water-works system of the city, were absolutely void, because made without authority of law. Huron Water Works Co. v. City of Huron (S. D.), 62 N. W. 975; 5 Thomp. Corp. § £ 880; 5 Am. & Eng. Enc. Law, p. 1068.

It appears from the pleadings in the record that about seven years intervened after the corporate defendants took actual possession under the void grant and lease, before this suit was instituted, and that nearly all of the £ipes and other parts of the water system delivered to the corporate defendants by the plaintiff had been replaced, and that the distributive system had been greatly added to and extended; that the Bear Biver Irrigation & Ogden Water-Works Company had expended more than $269,925.80 in replacing the old system, and in adding to and extending it; that the replacement of such new .system at this time would cost that amount. While we are of the opinion that the attempted transfer of the old water-works system by the plaintiff, and the leasing of its water right, were invalid, and the city of Ogden must be held to be the owner and entitled to the possession and control of the remaining portion, the possession of which it transferred to the corporate defendants, and that it is the owner and entitled to the possession and control *455of the water right, notwithstanding the lease to Bothwell and his assigns, we do not deem it necessary on this appeal to determine the rights and interests of the respective parties to and in so much of the present system constructed by the corporate defendants, or either of them. Such rights can be more satisfactorily determined in the light of all the evidence upon the final trial. The relative rights of the parties with, respect to so much of the new system as replaced the old may be distinguished from their rights with respect to so much of the system as consists of additions to and extensions of the old. The right and interest of the plaintiff to and in that portion of the system which the Bear River Irrigation & Ogden WaterWorks Company built during the time it was in possession and control is not sufficiently manifest and probable from the proof, — particularly their right and interest in and to so much of the plant and system consisting of additions and extensions. Nor was the danger of loss, removal, or material injury sufficiently established to authorize the court to take the possession of the entire waterworks system and business from the defendants, and place it in the hands of a receiver. The property involved consisted of a reservoir, conduits, and water pipes buried in the ground, and fire hydrants and other instrumental-ities connected with them. The defendants are not likely' to lose, remove, or materially injure these; and it does not appear from the evidence that business pertaining to the water-works has been neglected or mismanaged by the corporate defendants, or either of them. The order of the court below appointing Thomas D. Dee receiver is reversed, and the cause is remanded, with directions to order a return of the property to the Bear River Irrigation & Ogden Water-Works Company. Costs are awarded to the appellants.





Concurrence Opinion

Bartch, J.:

I concur in the judgment of reversal, directing the property to be returned to the defendant company.





Concurrence Opinion

Miner, J.

(concurring in part):

I concur in the opinion of the Chief Justice, in so far as it directs a reversal of the order appointing a receiver. This being an appeal from an order appointing a receiver, the questions as to the validity of the writing and contract between the city of Ogden and the Bear Lake & Kiver Water-Works Company, and of the resolution of the city council purporting to turn over to the Bear Lake & River Water-Works Company the water-works system of the city of Ogden, are not properly before this court, upon this appeal, for determination. Upon the final hearing many questions not heretofore presented to, or passed upon by, the trial court, may arise; and until that time, in my opinion, a decision upon questions not necessary for the determination of the question at issue, or upon the merits of the case, should be withheld. At the time this court denied the application made in this case for a writ of certiorari, and permitted, without argument, an appeal to be taken from the order appointing a receiver, the case of U. S. v. Church of Jesus Christ of Latter-Day Saints, decided by the territorial supreme court, and reported in 5 Utah, 394, holding that an appeal would not lie from an order appointing a receiver, had not been called to the attention of this court. So far as the present case is concerned, the determination of that question is the law of this case. But whether an appeal will lie from an order appointing a receiver in all cases is a question upon which I have serious doubts, under the decisions of this court, and the authorities cited. I expressly refrain from assenting to the doctrine laid down in the opinion of the Chief Justice upon this subject.