Weller v. City of Gadsden

141 Ala. 642 | Ala. | 1904

TYSON, J.

By section 1 of an ordinance adopted November lltli, 1902, tlie governing board of the city of Gadsden, to obtain for the use of the inhabitants of that city a supply of water for all purposes, granted to R. A. Mitchell, his associates, successors or assigns “the right and privilege to construct, maintain and operate water works for public and private use of water within said city, for a term of thirty years from the date of the completion of said water warks,” together with the right to lay pipes, erect hydrants, fountains and other structures and appurtenances, in any and all of the streets, alleys, lanes, parks and other public places of and in said city, as they then existed or might thereafter be laid out or extended, and as might be requisite'for the distribution of water or the operation of said water works system.

By section 2 of the ordinance, it.was provided that the condition upon which the foregoing privileges and franchises vvere granted, Avere made the subject of a contract between the said city and the grantees, which formal contract Avas thereby made a part of and embodied in the ordinance. After inserting the contract, it was, in conclusion, ordained “That the city of Gadsden, Alabama, hereby approves, ratifies and confirms the above ordinance and contract in all its terms and provisions,” and it was further provided how the “ordinance and'contract” should be executed, both by the city of Gadsden and the grantees and contractees, and it Avas duly signed and executed by both parties, in the manner prescribed by the ordinance; R. A. Mitchell “for himself his. associates, sxiccessors or assigns,” at the end of the ordinance, assenting in Avriting to all the terms of the ordinance contract, “with all its provisions, restrictions and requirements.” In the formal contract, embodied in the ordinance, the undertakings of Mitchell and associates are set forth in ten paragraphs.

Briefly, and as far as now necessary, their obligations may be thus stated: (1) To supply pumping engines; (2) to lay adequate mains; (3) when ordered by the, city, to extend mains, and place additional fire hydrants thereon; (4) to furnish a supply of water from a designated source or sources, sufficient for present and future needs of the city and private consumers; (5) to place upon the lines of mains or distributing pipes not less than sixty (60) hydrants, at such points as the city authorities may direct, for public use only, the city to first establish grades of the highways before pipes are laid; (6) to begin construction of the system twelve months before the expiration of the existing contract of the’city with the Gadsden Water Works Company, on or before January 1st, 1905, and to complete same ready for use by December 31st, 1905; (7) to discharge, when required, certain streams through hydrants and to maintain a certain pressure, which test, if successfully made, will entitle them to an acceptance of the works; (8) to furnish water for domestic and manufacturing purposes, at prices not exceeding a fixed schedule, and to furnish certain quantities of water for sprinkling, for drinking fountains, and for city buildings, free of charge; (9) to deposit a certified check, for one thousand dollars, to be forfeited if the work of construction is not commenced and completed within'the stipulated time, which check, the bill alleges, was deposited by the complainants and collected by, the city.

Thereupon, in consideration of the agreements and obligations of the other parties (having alréady in section 1 of the ordinance made a simple grant of the right, to construct and operate water works for thirty years, and to use the streets, etc., for pipes, etc.,) the city of Gadsden stipulated, in four paragraphs of the formal contract, embodied in the ordinance, as follows: (1) To grant the exclusive right to construct and ’ operate water works in said city for thirty years from date of acceptance!, with a proviso that the franchise and contract may be revoked at the option of the Mayor and Aldermen, whenever the works failed to furnish a proper and adequate supply of water and such condition continued for three months,;. (2) to grant the right to enter upon the streets, alleys, etc., to lay pipes, erect hydrants 'and do other necessary work of construction; (3) to pay an annual rental, for thirty years, of forty-two dollars for each of the first sixty hydrants set and put in usei, and forty dollars for each hydrant on the •extension of mains which the city may order; (4) to .grant the right to make' needful rules and regulations in regard to the use and waste of water, and to collect from consumers in advance a tariff of rates, not exceeding those specified. Delays in the beginning or completion of the work , due to certain named canses, are to operate as an extension equal to the time so lost.

The provisions of the contract which have mainly been the subject of discussion by counsel, are the grant of the franchise to use the highways and public places of the city for the operation of the water works and the delivery of the water to the city and its inhabitants, for the period of thirty years; the agreement that the grant of the right “to construct, maintain and operate water works, and conductors,” for the like time, shall be exclusive; and the obligations of the city to use and pay for hydrants, at a fixed price:, during the life of the contract. The contention of the city is that the agreement for the exclusiveness of the franchise, and the obligation to take water from hydrants for so long a time: as thirty years, are both invalid and that they, one or both, so infect the entire transaction with invalidity, as to destroy all rights under the ordinance. It is further insisted by the city, that if the foregoing contentions are not sound, then the ordinance was a mere offer or proposition, supported by no consideration, and that it was subject, for that reason, to repeal at any-time before work under it had actually begun; and, furthermore, that in any event, the franchise and -contract were, by virtue of section 22 of the Constitution of 1901, subject to revocation by the city authorities, at the time of the passage of the repealing ordinance of June 1st, 1903.

Under the Constitution, (Sec. 220) and its charter power over its highways and public places (Acts, 1882-83, p. 292, Sec. 22, sub. Sec. 10,) the city of Gadsden had authority to grant to complainants, the right to contract and operate a system of water works, including therein the right to use the streets, etc., for mains, pipes and hydrants.

By -Sec. 228 of the Constitution, the period of thirty years is recognized as proper for the duration of such a franchise in towns and cities of more than six thousand population; a fortiori would it be unobjectionable in a town or city containing less than that number of inhabitants, as to which the section fixes no time limit? Even if it may be maintained that it would not be proper to bind a city to take water, at a fixed price, for so long a time as thirty years, the considerations leading to that conclusion would not be applicable to the grant of a franchise to operate the system for the same length of time, since the large expenditure necessary to such an enterprise would scarcely be made for a franchise of shorter duration.

Whatever may be said as to the agreement to pay for hydrants, at a fixed price, for thirty years, and whatever conflict may exist in the authorities, as to the extent to which a court should go, in reviewing the discretion of a city council, in naming a fixed time and price for a water-supply contract, it is settled that under a charter, authorizing a city “to make needful provisions to* supply the city with water” (charter of Gadsden Acts, 1882-8, p. 292), its authorities may make such a contract, which will be valid, if not for the whole period, at least for a reasonable length of time. We so expressly decided in The City of Greenville v. Greenville Water Works Company, 125 Ala. 625. The proper duration of this part of the city’s obligation is not now material to be determined. That question will not be vital until after the works shall be built and the city, after use of the water for some period, shall claim a reasonable time has elapsed, and cease talcing the water, or seek to compel a furnishing of water at a lower rate. Should this situation arise, the agreement, in this particular, will be declared invalid simply for the excess, if any, beyond the permissible reasonable limit. — Robertson v. Hayes, 88 Ala. 290.

The agreement of the city that the grant of the franchise to complainants should be exclusive, (meaning thereby, tliat the city will nut itself compete in the business, nor confer a similar franchise upon another), is conceded to he ultra vires, and all benefit therefore lias by the bill, been expressly Avaived by the complainants; yet that clause of the contract is dormant and entirely innocuous until occasion arises for calling into play the rules of law against such exclusive feature. That time may never come; if it does, the clause now under consideration will form no obstacle in the Avay of a second grant to another or of the exercise by the city of the right to operate a system of its OAvn.

As said in Illinois Trust & Savings Bank v. Arkansas City, 76 Fed. 271, 281, cited in the Greenville Water Works case, supra: “The city is not endeavoring to construct Avater works or to lay. pipes in its streets, in violation of its’exclusive grant to the company, nor is any one attempting to do so, under its license or by its j.-ermission. No one seeks to infringe this exclusive grant. In practical effect, it stands unchallenged and may ever continue 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 Avliich the courts ought not to, and will not, avoid any part of the contract.” Furthermore, the tAvo' clauses of the agreement, against which counsel for the city have inveighed, are severable and distinct, and their presence in the contract furnished no reason why the grant of the franchise to operate a system of water Avorks- should fall to the ground. It does not lie in the month of the city to say, that because it may have contracted beyond its authority, in one or even two particulars, it, therefore, granted and contracted for nothing. The provisions assailed were both for the benefit of the complainants, and if those portions are eliminated, the result simply is that the city obtains a better contract than it was Avilling to make.

The ordinance contract, assented to in writing by both of the parties, derives its force from such assent, rather than from its mere passage in the manner required for ordinances, which prescribe rules of conduct for those Avithin the jurisdiction.

It was not a nuclum pactum, nor a mere offer or proposition, nor a simple license - it was a contract, containing mutual agreements, supporting and supported by each other. The obligation therein assumed by complainants, to erect and operate1 the water-works system and to furnish certain water free of charge, secured in part at least by the deposit of one thousand dollars, or its equivalent, which was turned into cash, furnished a present adequate cofisideration for the grant by the city of the thirty-five year franchise (a franchise being necessary to enable complainants to- comply with their agreement to furnish water) as well as for its obligation to pay for the hydrants at least for a reasonable time, conceding, for the sake of argument merely, that thirty years exceeded a proper period.

The contract which the parties executed, although in the form of and called an ordinance, ivas entered into by the city, in the exercise of its administrative or business powers, rather than under its governing or purely law-making authority. — City of Greenville v. Greenville Water Works Company, supra; Ill. Trust & Sav. Bank v. Arkansas City, supra; I Dillon on Mun. Corp. (4th Ed.) Sec. 66.

It was not, therefore, even if executory, repeatable, like a mere act of legislation or an ordinance, pure and simple, at the will of the enacting power.- — Safety Wire & Cable Co. v. City of Baltimore, 66 Fed. 140.

A valid contract, entered into by a municipal corporation, may no more be repudiated, without just cause, than the contract of a private corporation or individual City of Indianapolis v. Gas Light Co., 66 Ind. 396; 2 Dillon on Munic. Corp. Sec. 935.

The same thing may be said of the valid portions of the contract of a municipal corporation, containing a severable invalid clause, where, as here, the provision for exclusiveness of the grant is not immoral nor illegal, but merely ttltra vires, its want of enforcibility growing out of the fact that power to1 make the grant exclusive has not been conferred upon the city by the legislature and under constitutional inhibitions could not be conferred. — Birmingham Street Railway Case, 79 Ala. 465.

Section 22 .of the Constitution of 1901, provides that “no ex post facto law, nor any law, impairing the obligations of contracts' or making any irrevocable or exclusive grants of- special privileges or immunities shall be passed, by the legislature, and every grant of a franchise, privilege or immunity shall forever remain subject to revocation, alteration or amendment.”

The concluding clause, which first appeared in the constitution of 1901, is relied on to sustain the ordinance, purporting to revoke the right's of complainants, under this contract. It is obvious that this section refers to laws and grants made by the legislature, and to revocations, alterations and amendments by the ■ legislature, or perhaps by its authority of grants of franchises, privileges and immunities, made by that body. No such revocation of the ordinance contract of the city of Gadsden has been attempted by the legislature, nor has that body conferred or attempted to confer on the city authorities the power to revoke1 such a contract, even if it be true that the contract of the city, containing, among other things, a grant of a franchise founded on a valuable consideration, and necessary to enable the1 grantees to perform their obligation to furnish water, is such a grant of a franchise as comes within the contemplation of section 22, and thus within the power of the legislature to revoke — a proposition we do not wish to be understood as deciding or admitting. ,

Jt Avculd be unwise, and it is unnecessary, to now undertake to ascertain the full scope1 and purpose of the concluding clause of said section or to define the grants of franchises, privileges, or immunities that .may fall within its' influence. Its full meaning may be best developed as cases arise, in which its application is invoked. Suffice it here to say, that no matter what else it may mean and no matter what grants or franchises are thereby made to rest upon the continuing grace of the legislature, section 22 was not intended to1 make municipal contracts, including valid grants of franchises for public utilities, supported by a' valuable consideration, depend upon the constant favor of a city council or subject to the- whims and caprices of successive city governmental officials. To sustain the contention of the city on this point would, practically destroy all hope of interesting investors in the useful and necessary public enterprises, and cast upon the towns and cities of the state the burden of constructing water-works and the like modern conveniences, by the expenditure of public funds-. This burden by reason of their limited debt — contracting and revenue — raising power, the smaller towns and cities, at least, ivould, in most- instances, probably be unable to bear. If the convention had intended the obvious and unfortunate result, it is most likely that the clause would have been the subject of some discussion by the members of that body, and the intent would not have been left to- be inferred, from the general language of a section referring entirely to the state legislature.

The ordinance, under which the complainants claim, as we have said, is more than a mere grant of a franchise1; it is a contract and must be treated as such. Vincennes v. Light Co., (Inch) 16 L. R. A. 485.

The conclusion is, that the ordinance contract, under which complainants claim, is not void in tato, that it confers valuable rights, that the so called repealing ordinance was utterly ineffectual to impair the contract-in so far as it was valid, and that in so far as the contract was unauthorized, a repealing ordinance was wholly unnecessary. In other words, the ordinance, attempting to- repeal the franchises and rights conferred on complainants, was void and of no effect on its face, as the bill alleges.

It would unduly extend the opinion to review the cases cited on behalf of the city, in support of its- several contentions. An examination of them will disclose that they are not in conflict with the principles we have applied, when the peculiar facts of those case-! are considered, and note is taken of the manner in which, and the parties between whom, the controversies were presented.

We may remark, however, that in Capital City L. & F. Co. v. Gity of Tallahassee, (Fla.) 28 So. Rep. 810; s. c. 186 U. S. 401, so much relied on by the counsel for appellee, to sustain the proposition that the franchise is revocable at any time before work is actually begun, or money invested in a plant, the court was dealing with an ordinance for which there was no-consideration and by which no obligation was imposed on the city to take electric lights from the' Light & Fuel Company. The case is also distinguishable from this one in other particulars.-

In enterprises of such magnitude as the construction of water works, a preliminary period of preparation’ is absolutely necessary, and the fact that work is to begin at a future fixed time, the agreement to begin and complete the work being absolute, furnishes no reason in law or justice', why during that interval the obligation of the contract should be subject to the repudiation, either by an individual or a municipality.

The last question is, whether in view of the nullity of the ordinance, assailed by the bill, a resort! to a court of equity by the complainants, under the circumstances disclosed, is either proper or necessary. This question has not been discussed by counsel for the city, who1 have confined themselves to insisting that the ordinance contract was totally invalid, and that, at all events, the city had the right to repeal or revoke-it, before work was begun. It necessarily arises, however, and must be de-‘ cided, upon the motion to dismiss for want of equity; for although the rights of appellants are declared, in arriving at the ultimate conclusion here reached, it would be idle to return the case to the court below, merely for the purpose of having a decree, nullifying that which appears on its face to be void. — 6 Am. & Eng. Encv. Law (2nd Ed.) 155; Maloy v. Daugherty, 16 Wis. 269.

In the fourth paragraph of the bill, it is alleged in general terms that “the.board of aldermen are threatening and endeavoring and attempting to breach said contract and repudiate the same, by preventing orators from using said streets, avenues and alleys for the purpose of laying said water pipes, mains, etc.,” but at the close of the same paragraph there is a specification under this general allegation that “The said Mayor and. Board of Aldermen attempted to deny and deprive orators of tbe use of said streets, avenues and alleys in a particular way, that is, “by tbe passage of an ordinance, a copy of which is hereto attached, marked exhibit B.” It will be noted that the time for beginning work, and for the actual enjoyment of the franchise has not arrived and the hill does not aver a readiness or an offer to begin work, nor any application to the city to fix grades or. designate streets, wherein mains are to be laid, nor any threatened act of interference with anything complainants desired to do' or that they had a right to do. Obviously, the bill simply makes a case of the passage of a void ordinance, which does not even cast a cloud on their franchise or contract, it not being necessary to introduce evidence to demonstrate its invalidity. — Parker v. Boutwell, 119 Ala. 297; Borst v. Simpson, 90 Ala. 373.

Counsel on both sides in their briefs treat the case upon the theory that nothing further was done by the city than to pass the ordinance. It is conceded by complainants that this is not a bill for specific performance. It is said to be one “to prevent the destruction of contractual obligations,” and is treated also by their counsel as one to protect a franchise. In support of its equity, four cases are cited. — S. & N. R. Co. v. Highland Avenue & Belt R. Co., 98 Ala. 400; Bienville Water Co. v. Mobile, 112 Ala. 260; Port of Mobile v. L. & N. R. Co., 84 Ala. 115; Hendricks v. Hughes, 117 Ala. 591. Bui; each of them was a case, wherein there was a threatened invasion by some special act of interference with a right or franchise then being enjoyed or exercised. When Mitchell and associates, their successors or assigns, are ready to begin work under their contract, the void ordinance will be no obstacle, and if any interference with theifi rights is then threatened, it will be time enough to resort to judicial proceedings, and to consider what the remedy shall be. The repealing ordinance prescribed no penalties, and, in and of itself required no affirmative action, hostile to the rights of the complainants, on the part of the mayor or other officers or agents of the municipality.

1 The bill, therefore, is without equity. As the Supreme Court of Iowa said in Des Moines Gas Co. v. City of Des Moines, 24 Am. Rep. 756 : “If the ordinance sought to be enjoyed is void, by reason of its unconstitutionality, the plaintiff can be in no wise injured by its' passage. A void law is no law, and this without doubt is true as to an ordinance. No injury — much less one of an irreparable character — can he inflicted by such an ordinance.” It is only when .the invalid ordinance is sought to be put in force or its enforcement is threatened to the injury of a right or franchise, then being enjoyed or sought to he exercised, that resort to á court for protection is necessary; and then relief is granted; not against the void ordinance, but against the wrongful act, which threatens invasion of the right.

The city court dismissed the bill for want of equity, though not for tbd reasons, here given. Its opinion was favorable to the city, upon the merits of the controversy, but while its reasoning was erroneous, the decree of dismissal was correct.

In view of the proper dismissal of the bill for want of equity, it is not necessary to consider the rulings upon the demurrer.

Affirmed.

McClellan, C. J,. Haralson and Dowdell, J. J.

If the ordinance which the bills seeks to have expunged is a valid ordinance, of course the complainants are not entitled to the relief prayed for. On the other hand, if that ordinance is invalid it is innocuous to the alleged rights of the complainant, as declared in the opinion of Justice Tyson, and complainants for that reason have no standing in a court of equity to have it expunged. Upon these considerations we concur in the conclusion of Justice Tyson that the bill was properly dismissed for want of equity; but we neither concur in nor dissent from the other views expressed by him, the case, to our minds, not requiring any decision or expression as to the ultimate rights of the parties.

Sharpe, J., not sitting.-