State ex rel. Great Falls Water Works v. Mayor of Great Falls

19 Mont. 518 | Mont. | 1897

Buck, J.

Winnowing the grain of this controversy, — distinguishing the substance from the shadows of law invoked,— the vital issues are less numerous than the many questions elaborately discussed in brief and argument seem to indicate.

It is apparent from the record that, in the refusal of the city council of Great Falls to allow relator’s claim for hydrant rentals, the actual motive was to repudiate the water contract, because it had grown burdensome, through changed financial conditions. It is also manifest that the district court which granted the motion for a new trial acted solely on the theory that relator’s remedy for its alleged wrong was not mandamus. While it is true as a general proposition that a correct decision or ruling will not be disturbed on appeal, even if the reason announced for the same is erroneous, nevertheless an appellate court is under no compulsion to grope in speculation for a possibly good reason. Therefore, in the determination of an appeal,' a reason explicitly given for its ruling or decision by an inferior tribunal is always entitled to more consideration than mere possibly good reasons subsequently conceived or urged. -If a false reason is given, the sound one supporting it should be clearly apparent and readily supplied. Were it otherwise, ingenuity in mere idle argument would result, and doubt would be encouraged for the sake of mere doubt. Hence we propose to deal very briefly with many of the objections raised.

Was the water contract void for fraud in its inception? The judge who tried the case found that Paris Gibson, the mayor of the city of Great Falls, at the time Ordinance No. 17 was passed and approved, was not interested in the water contract, and there was evidence to support the finding. The fact that Gibson, while mayor of the city, had agreed (after the acceptance of the contract filed with the proper city official, on April 9, 1889) to take shares of stock in the corporation succeeding to the rights of the original parties contracted with, did not render this contract void, under sections 345 and 347 of the Compiled Statutes 1887, forbidding a mayor or alderman to be a party to any city contract, or to be interested in the profits of any such contract entered into while he was in office. Now, whether the city of Great Falls might be affected by any breach of trust on the part of its mayor in connection with such a contract, or any violation of law declared by statute to be a breach of trust, it is unnecessary to discuss. The allegations in the answer as to Gibson’s connection with the passage and approval of the. ordinance are indefinite in character. It is averred that Ordinance No. 17 was caused to be passed by Collins et al. and Gibson, and that, through their united influence, the city was induced to enact the same. It is not averred that Gibson as mayor voted for the ordinance. Under the statutes in force at the time, he would not, as mayor, have had a vote in the proceedings of the council, unless there had been a tie.

The defendants offered to prove by the minutes of the city council'that the acceptance of the ordinance (which was admitted by the answer to have been filed within time, but which, upon the trial, was shown to have been filed two days later than the time prescribed by the ordinance) was not considered by the city council until April 12th, at which meeting the acceptance was received and placed on file. Objection was made on the ground of immateriality and sustained. The defendants then offered to amend the answer by alleging that the grantees in the ordinance did not accept its provisions until the 12th day of April, 1889. The court refused to allow this amendment. It is true that the city might at the time have objected that the acceptance had not been filed within the 10 days prescribed, but it did not do so. It allowed the construction of the waterworks in accordance with the terms of the ordinance, and proceeded to use and enjoy the water furnished thereby. For a number of years the ordinance was treated as valid and binding in every respect. There was no suggestion in connection with the evidence offered that Gibson had or could lawfully have voted as to the acceptance at the meeting held on April 12th. Under these circumstances, there was a waiver of any defect so far as the acceptance was concerned.

Was the contract void because it granted an exclusive right or fixed the hydrant rates for an unreasonable length of time ?

It is to be borne in mind that there is no one in this proceeding claiming under any right conflicting with the relator’s to supply the city of Great Falls and its inhabitants with water. The attitude of the city is simply this : It desires and contemplates a continuance of the use of the water supplied by relator, but insists upon such use upon its own terms, regardless of the original contract. The situation is entirely different from what it would be were the exclusive or unreasonable feature of the franchise being attacked prior to the performance of the terms of the contract. Contracts establishing fixed rates of payment, or granting exclusive rights for a long term of years to supply the needs of cities, should be always closely scrutinized by the courts when directly attacked, before substantial rights have vested through performance. It is true, the question for what length of time a city council may lawfully enter into such contracts depends largely for its answer upon the facts and conditions involved in each particular case. Respondents contend that, for the last-mentioned reason, the trial court should have allowed them to show the promising future of the city at the time the contract was entered into, and the probability that a much more favorable water contract could have been obtained. But what if it had been shown the city officials acted unwisely as to the terms of the contract ? Rights have vested through the performance of many of said terms. No fraud is alleged, or even suggested, on the part of .the members of the city council, other than the mayor, in entering into this contract. From March 27, 1839, up to August, 1896, for a period of more than seven years, no objection was raised (so far as the record discloses) in any manner to this contract. Bonds had been issued on the water company’s plant, and money realized from the sale of bonds expended thereon. There was no error in the exclusion of this evidence.

Respondents urge : ‘ 'Counsel for appellant seem to' contend that we cannot now raise the defense of unreasonableness of contract. If this were a proceeding for the payment of past hydrant rentals alone, there would be some force in the proposition. But this is more. This proceeding is brought to obtain, and the trial court granted, a mandamus to compel not only an allowance of the claim for past-due rentals, but also to compel the levy of a tax and an appropriation of sufficient money to pay rentals maturing for the year ending May 1, 1898. If this is to be upheld, it is only on the theory that the contract is valid for the entire period of time covered by its terms. ’ ’

The city in this proceeding is not seeking to use water to be supplied by other means than the relator’s plant. It neither contemplates or suggests the supply of water to it by other means; and no rival in the water business seeking the patronage of the city, attacks this contract under a right or privilege antagonistic to it.

The city virtually accepts the results of this contract in part —so far as they are beneficial to it — even while protesting that it is void ab initio. In Davenport v. Kleinschmidt, 6 Mont. 502, 13 Pac. 249, it was held that an ordinance of the city of Helena was void because it granted the exclusive right to supply said city with water for fire and sewerage purposes at fixed rates for a period of 20 years. The court granted a perpetual injunction at the prayer of certain taxpayers, to prevent the carrying out of the terms of the ordinance. But this was done before any work had been commenced under the contract embodied in the ordinance. For special reasons in that case, it was not determined whether the Helena ordinance was severable in respect to what was valid and what invalid in its provisions. We do not deem it necessary to decide, under the existing condition of facts presented by this appeal and the law applicable thereto, whether the exclusive 15-year privilege granted in Ordinance No. 17 is void or not, either on the ground of monopoly or unreasonableness of time in prescribing fixed hydrant rentals. The city is estopped in its individual capacity by its present attitude from availing itself of this defense.

Nor is it necessary to determine any question which may arise in the future as to whether the relator can insist upon a renewal of the ordinance contract at the expiration of the 20 years prescribed therein, if the city of Great Falls does not purchase this water plant. We must decide the controversy only on the phase of it as presented at this time.

The law as announced in the case of Illinois Trust & Savings Bank v. City of Arkansas, City, 76 Fed. 271, 22 C. C. A. 171, is peculiarly applicable in many respects to the present case. We quote from it the following applicable language:

‘ ‘Moreover, the city is in no position in this case to insist upon the invalidity of the exclusive character of this grant, if that could avoid its entire contract. The city is not endeavoring to construct waterworks or to lay pipes in its streets in violation of its exclusive grant to the gas company, nor is any one attempting to do so under its license or by. its permission. No one seeks to infringe this exclusive grant. In practical effect it stands unchallenged, and may ever continue to be so. Until it is challenged by the act or endeavor of some one who seeks to infringe it, its validity or invalidity is a moot question, on account of which the courts ought not to, and will not, avoid any part of the contract. No one who does not infringe or threaten to infringe the exclusiveness of the grant in a contract made by a municipality can, after the substantial performance of the contract by the grantee, be heard to say that the contract or grant is void on account of the exclusive character of the latter. [Authorities cited.] But it is insisted that this contract is beyond the powers of this city, and void, because it grants the right to use the streets of the city to the water company, and promises to pay rental for the hydrants, for twenty-one years. The proposition on which this contention rests is that the members of the city council are trustees for the public; that they exercise legislative powers; and that they can make no grant and conclude no contract which will bind the city beyond the terms of their offices, because such action would circumscribe the legislative powers of their successors, and deprive them of the right to their unrestricted exercise as the exigencies of the times might demand. There are two reasons why this proposition cannot be successfully maintained in this case: First, it ignores the settled distinction between the governmental or public and the proprietary or business powers of a municipality, and erroneously seeks to apply to the exercise of the latter a rule which is only applicable to the exercise of the former. A city has two classes of powers: The one legislative, public, governmental, in the exercise of which it is a sovereignty, and governs its people; the other, proprietary, quasi private, conferred upon it, not for the purpose of governing its people, but for the private advantage of the inhabitants of the city and of the city itself as a legal personality. In the exercise of the powers of the former class, it is governed by the rule here invoked. In their exercise, it is ruling its people, and is bound to transmit its powers of government to its successive sets of officers unimpaired. But, in the exercise of the powers of the latter class, it is controlled by no such rule, because it is acting and contracting for the private benefit of itself and its inhabitants; and it may exercise the business powers conferred upon it in the same way, and in their exercise it is to be governed by the same rules that govern a private individual or corporation. [Authorities cited.] In contracting for waterworks to supply itself and its inhabitants with water, the city is not exercising its governmental or legislative powers, but its business or proprietary’ powers. The purpose of such a contract is not to govern its inhabitants, but to obtain a private benefit for the city itself and its denizens. Second. The powers granted to this city by the legislature of the state of Kansas to contract for and procure waterworks are plenary and unlimited, save by the duty to exercise them with reasonable discretion; and it is not the province of a court to contract or clip the legislative grant.”

We are satisfied that these reasons apply generally to this appeal.

The case of Davenport v. Kleinschmidt, supra, refers to the distinction between the character of a city considered in its individual and its governmental capacity. See page 534, 6 Mont., and page 256, 13 Pac. The court expressly refused to hold the Helena ordinance void, because it restricted the future legislative powers of the city council.

Appellant says, in its brief:

“In the case of Davenport v. Kleinschmidt, 6 Mont. 502, 13 Pac. 249, the court distinguishes the cases of Burlington Water Co. v. Woodward, 49 Iowa, 59, and Grant v. City of Davenport, 36 Iowa, 401, and uses the following language: £In all of the water cases arising in the state of Iowa, we are met with a general statute which authorized all cities to contract for the erection of waterworks, and to pay for the water used by special fund, raised by a special annual tax, not to exceed five mills on the dollar; and such contracts with water companies were held not to create a debt against the cities, because the water companies would never have any general? claim against the cities, but were held to look to the special fund alone for the satisfaction of their demands.’ After the decision in this case, and in the year 1889, the legislative assembly of the territory of Montana passed the act herein-before quoted, conferring upon cities the power to levy and collect a tax not to exceed five mills on the dollar for fire and water purposes.”

The act of the legislature referred to (See Sess. Laws 1889, p. 185, § 16), is as follows

“That section four hundred and fifteen, as amended by £An act to amend an act relating to the formation of municipal corporations,’ be amended so as to read as follows: ‘Section dl5. The amount of corporation taxes to be assessed and levied in any one year on the taxable property of any city or town for general municipal or administrative purposes shall not exceed three-fourths of one per centum, and for fire and water purposes one-half of one. per centum on the assessed valuation of such property and such special assessments as may be levied from time to time as provided for under chapter twenty-two, Fifth Division of Compiled Statutes of Montana, and the amendments thereto. ’ ’ ’

This law was in force when Ordinance No. 17 was passed, approved, and accepted. We are of the opinion that this law became a part of the contract embodied in said ordinance, and that relator had a right to insist that, in so far as might be necessary to pay what was due it for hydrant rentals in' accordance with rates prescribed in the ordinance contract, a special tax, as provided for in that act, should be levied annually; of course, in only such sums as would be needed, and not exceeding tbe five mill limit. The contract was entered into in contemplation of a special fund being created by the city to meet liabilities incurred thereunder; and the legislature, in said act, contemplated at the time that cities of the territory should pay for water used by them for sewerage and fire purposes from taxes levied and collected for that specific purpose. The case of Davenport v. Kleinschmidt, supra, does not disapprove the íowa cases holding that, because a general law provided for payment from a special fund, a liability incurred by a city to supply its inhabitants with water was not a debt, in the sense of the term as employed in the constitution of Iowa, forbidding cities to incur debts in excess of a certain proportion to their assessable property. It was under different conditons of law and fact that the supreme court of the territory of Montana held in Davenport v. Kleinschmidt that the liability incurred by the city of Helena under its ordinance contract was a debt. This appears from a careful reading of the case.

Respondents urge: ‘‘The provisions of section 27, containing the agreement of -the city to pay the hydrant rentals to the bondholders, and requiring a certificate of such agreement on the back of each of the bonds, is an attempt to loan to the company the credit of the city, in violation of Act Congress 1886, § 2 (Comp. St. Mont., at page 32).” This section referred to is as follows: “That no territory of the United States now or hereafter to be organized, or any political or municipal corporation or subdivision of any such territory, shall hereafter make any subscription to the capital stock of any incorporated company, or company or association having corporate powers, or in any manner loan its credit to or use it for the benefit of any such company or association or borrow any money for the use of any such company or association. ’ ’

W e hold that the act of congress was not violated by section 27 of the ordinance, and the action of the city thereunder as to its certificate on the bonds.

It follows, in this view of the case, that neither under the organic act of the territory of Montana, nor the constitution o of the state of Montana, is or was the liability incurred by the city of Great Falls under Ordinance 17 a debt in the sense prohibited. After rights had vested under the act of the legislative assembly passed in 1889, supra, neither the legislature nor the people of Montana, by adopting a constitution, could have impaired the contract obligation attaching. The constitution of the United States forbids this. See Wolf v. New Orleans, 103 U. S. 358, and Von Hoffman v. City of Quincy, 4 Wall. 535.

Does the alternative writ contain allegations showing a cause of action which would entitle relator to a writ of mandamus? Yes.

Did relator have any plain, speedy, and adequate remedy in the ordinary course of law?’ It did not. Mandamus was clearly the remedy. Mandamus, even in the common-law view of it, long ago ceased to be a prerogative writ, and became gradually, both in the English and American courts, to be regarded and interpreted as a writ of right. Since the breaking down by the codes of so many of the formal barriers between equity and law, the remedy by mandamus, however different its legal history from the writ of injunction, is none the less elastic and adaptable within its proper sphere, as the latter is wichin its sphere. The function of each is by summary legal intervention to prevent wrongdoing. The one sets the law in motion to compel the doing of what should be ds.ne; the other prevents or checks threatened or actual wrongdoing. Each serves the ends of justice practically. Each is a developed remedy, adapted to the modern needs and ideas; and, when the proper occasion demands either, the writ should be issued readily, without regard to any mere lifeless distinctions of past history.

Sections 1961 aiid 1962 (relating to mandamus), Code Civil Procedure Montana, 1895, are as follows:

“Sec. 1961. It may be issued by the supreme court or the district court, or any judge of the district court, to any inferior tribunal, corporation, board or person, to compel the performance of an act which the law specially enjoins as a duty resulting from an office, trust or station; or to compel the admission of a party to the use and enjoyment of aright or office to which he is entitled and from which he is unlawfully precluded by such inferior tribunal, corporation, board or person.

“Sec. 1962. The writ must be issued in all cases where there is not a plain, speedy and adequate remedy in the ordinary course of law. It must be issued upon affidavit, on the application of the party beneficially interested. ’ ’

Under said section 1961, the issuance of the writ does not depend upon the exercise of a mere discretion on the part of the court or judge, regardless of the question of whether there exists a plain, speedy, and adequate remedy in the ordinary course of law. The discretion should be exercised in connection with the answer to that question. But, under section 1962, if there is not a plain, speedy, and adequate remedy in the ordinary course of law, then there is no discretion. The court or judge must issue the writ.

Had the city of Great Falls anything before it to be determined.or decided when relator’s claim for hydrant rentals was acted upon, on October 5 and November 2, 1896? No.

The question of the number of hydrants had been decided months previously, and payment had been made for 251 hydrants up to May 1, 1896. The answer itself concedes that the mains to an extent requiring 251 hydrants had been laid under the direction of the city government. The city’s own records establish the fact, and the trial court found, that 251 hydrants had been placed and accepted along these mains. The evidence offered to prove that three of these hydrants were outside of the city limits, and that six others were in an addition to the city, and maintained under a special agreement, and that 13 others were below the surface of the ground, and therefore inaccessible for fire and sewerage purposes, was all properly excluded. There was no averment in the answer laying any foundation for evidence to contradict the city’s own records kept presumably in accordance with the law re-A quiring them to be kept.

If the city is dissatisfied by reason of defects in any hydrants, it certainly, under ,the terms of its contract, can remedy the same. So far as the three hydrants outside of the city limits are concerned, they may be so near the city limits as to be necessary at those points for the protection of the city.

The evidence offered to show that relator had no city or county license was also properly excluded on the trial. There was no allegation in the answer to support its admission, and it was improperly sought to be elicited on cross-examination.

The offer to show that impure and unwholesome water had been furnished the inhabitants of the city was wholly immaterial. The point from which the water was to be taken by the relator had been expressly' agreed upon in the ordinance, and there was no issue as to the quality of the water furnished.

The objection that there was a defect of parties, averred in the answer, and sought to be maintained on the trial, came too late. No advantage was taken of any defect by demurrer, as the Code of Civil Procedure provides it shall be taken. To prevent any possible injustice to the city in this respect, however, proper provision can be made in the writ which we shall direct to be issued. Relator was clearly beneficially interested in the enforcement of the ordinance.

The objection that the alternative writ fails to contain any allegation in compliance with section 4808 Political Code Montana, requiring an affidavit reciting certain facts as to the interests of the parties in the claim presented, is without merit.

The conclusion is unavoidable that the sole and only reason prompting the city council to reject the claim of relator on October 5 and November 2, 1896, was to repudiate the contract; and the other possible reasons suggested to uphold its action are without merit. We cite Wood v. Strother, 76 Cal. 545, 18 Pac. 766, in this connection; also People v. Supervisors of Otsego Co., 51 N. Y. 401.

As to the question of whether or not the city was properly commanded to levy sufficient taxes for the year ending May 1, 1898, our view is as follows: The city had announced that it' repudiated the water contract, but still clung to the use of the water furnished by the relator’s plant. Under these circumstances, the command was a proper one. It is clear to-us that relator, under all. these conditions we have set forth, had no plain, had no speedy, and had no adequate, remedy in the ordinary course of law. The judge who granted the new trial should not have done so, and the same must be set aside.

The cause is remanded, with directions to the lower court to grant a peremptory writ of mandamus as prayed, but to direct therein that any wariant drawn on the water fund of the city be delivered into court, to be held there, and not turned over to relator, until the written consent of the Illinois Trust & Savings Bank has been obtained.

Pemberton, C. J., and Hunt, J., concur.