146 P. 191 | Cal. Ct. App. | 1914
Plaintiff brings the action to recover from defendants seven and seven-eighths per cent of the gross annual receipts collected by defendants for water supplied to the plaintiff and its inhabitants for the five years commencing 1907 and ending 1911, stated in seven separate counts. The amended complaint was filed August 5, 1912. It does *193 not appear when the original complaint was filed. A general and special demurrer to the amended complaint was sustained, without leave to amend, and judgment passed for defendants that plaintiff take nothing by its action and that the action be dismissed.
It appears, from the amended complaint, that, on September 19, 1899, plaintiff passed a resolution directing the town clerk to advertise for bids for the sale of a franchise for supplying said town and its inhabitants with water, for domestic and general purposes, for a term of fifty years. The form of ordinance to be used in granting the franchise was adopted and it was ordered "that no bids, proposals or tenders will be received for a single amount stated, but that all bids, tenders, or proposals must be for the payment in lawful money of the United States of a stated per centum of the gross annual receipts of the grantee, arising from its use, operation or possession, and further stating that no percentage will be paid for the first five years succeeding the publication of such franchise, but that thereafter such percentage will be payable annually, and shall in no case be less than three per centum per annum upon the said gross annual receipts."
The clerk, on September 22, 1889, gave notice, pursuant to said resolution and orders, inviting sealed proposals and, among other things, stated: "that the character of such franchise or privilege proposed to be granted, the conditions, limitations and provisos under which the same will be granted, and the term of its continuance is more fully set out and will appear by reference to the said resolution, hereinabove referred to, to which said resolution reference is hereby expressly made for further and fuller particulars.
"No bid or tender will be received of a single sum or amount stated, but all bids must be for the payment, in lawful money of the United States, of a stated per cent of the gross annual receipts of the person, partnership or corporation or other authority to whom the franchise or privilege is awarded, arising from its use, operation or possession.
"That no percentage shall be paid for the first five years succeeding the date of the franchise, but thereafter such percentage shall be paid annually, and shall be in no case less than three per cent per annum upon such gross annual receipts, the franchise to be forfeited by failure to make the payments stated, in the bid upon which the award is made. *194
"Bidders must file with each bid, tender or proposal, a bond to the town of St. Helena, with at least two good and sufficient sureties, to be approved by the board of trustees of the said town, in a penal amount of five thousand dollars, conditioned that such bidder shall well and truly observe, fulfill and perform each and all of the terms, conditions and obligations of such franchise, in case the same be awarded to him."
Pursuant to this notice, which was duly advertised in a newspaper, defendant Ewer submitted the following to the board of trustees: "The undersigned hereby bids and tenders seven and seven-eighths (7 7/8) per cent of the gross annual receipts arising from the use, operation or possession of the franchise offered for sale by your honorable board in accordance with the inclosed and attached advertisement 'Inviting Bids or Tenders for Sale of a Franchise' dated September 22nd, 1899, which is hereby referred to for fuller particulars and which advertisement is made a part hereof.
"(Signed) F. S. EWER."
On December 12, 1899, the board of trustees duly passed ordinance No. 129, granting said franchise and, on December 21, 1899, defendant Ewer notified the trustees, in writing, as follows: "I hereby accept the franchise granted to me by your honorable board under ordinance No. 129, and published in the St. Helena Sentinel, under date of December 21st, 1899.
"Yours truly, "(Signed): FRED S. EWER."
Ordinance 129 grants "to Fred S. Ewer, his heirs and assigns, the right, privilege and franchise to construct, establish, maintain and operate a system of waterworks for the purpose of supplying to the town of St. Helena and its inhabitants," etc. Then follow provisions granting right of way over streets, alleys, etc.; the right to lay pipes, maintain reservoirs and the like; the term of the franchise is fifty years; rates to be charged and the manner of laying down pipes, etc., are subject at all times to be regulated by the town. Other provisions follow which need not be given. It was provided, also, that "nothing herein contained shall be construed in any manner as granting an exclusive franchise." It is alleged in the amended complaint that Ewer assigned all of his interest in said franchise to defendant, St. Helena Water Co., in 1901. *195
Appellant says in its brief "that while the general structure (of the ordinance) follows the statute (Stats. 1897, p. 135), there is a clause inserted therein which places it entirely without the statute." The clause referred to reads: "Nothing herein contained shall be construed in any manner as granting an exclusive franchise" and hence, it is claimed, takes the case out of the operation of the decision in Pereria v.Wallace,
Appellant still further contends that conceding the contract to pay the claim here made to be invalid, it is not illegal orunlawful and hence defendant is estopped to dispute its validity.
It was held, in Pereria v. Wallace,
The case of People v. Stephens,
The question is discussed in more recent cases, among them,In re Johnston,
It is urged that in declaring in the ordinance that "nothing herein contained shall be construed in any manner as granting an exclusive franchise," relieves it from any constitutional inhibition and differentiates it from the acts of municipalities brought under review in the cases cited. We cannot so regard the effect of the ordinance. The town authorities had no power to impose the condition to granting the franchise that the successful bidder should pay a per cent of the "gross annual receipts, the franchise to be forfeited by failure to make the payments stated in the bid on which the award is made." This, we think, was a burden placed upon the bidder unauthorized by the constitution. The declaration that the franchise should not be regarded as exclusive did no more than to announce what would have been true without it, for the constitution gives to every person the right to use the public streets of a municipality for the purposes indicated and, as the cases cited hold, it deprives not only the municipality from granting but the legislature from authorizing the granting of franchises upon conditions other than those specified in the constitution. (Clark v. Los Angeles,
The contention that the claim may be enforced as the subject of private contract between Ewer and the town cannot be maintained. The facts alleged show beyond dispute that in dealing with the public, as respondent points out, the municipality was acting in its legislative capacity and that its action is not referable, for its support, to the power of making contracts. In City of South Pasadena v. Los Angeles etc.Co.,
Nor do we think the plea of estoppel available to plaintiff. The town had no power to impose the condition that the bidder should pay a per cent of his gross annual earnings.
In the case of City of Arcata v. Green,
We do not find it necessary to consider the special demurrer. We are satisfied that the amended complaint does not state facts sufficient to constitute a cause of action.
The judgment is affirmed.
Hart, J., and Burnett, J., concurred.