Pikes Peak Power Co. v. City of Colorado Springs

• Decision Date: 05 November 1900
• Docket Number: 1,413.
• Parties: PIKES PEAK POWER CO. v. CITY OF COLORADO SPRINGS.
• Court: U.S. Court of Appeals — Eighth Circuit

105 F. 1

PIKES PEAK POWER CO. v. CITY OF COLORADO SPRINGS.

No. 1,413.

United States Court of Appeals, Eighth Circuit.

November 5, 1900

(Syllabus by the Court.)

In any case in which the constitution or law of a state is claimed to be in contravention of the constitution of the United States the circuit courts of appeals may either (1) decline to take jurisdiction, or (2), where other questions are involved, take jurisdiction, and certify the constitutional question to the supreme court, or (3) take jurisdiction, and decide the whole case in the first instance. 26 Stat. 826, c 517; Carter v. Roberts, 20 Sup.Ct. 713, 177 U.S 500, 44 L.Ed. 861.

Where a dismissal of an appeal would cause a delay of years in the decision of a case of considerable importance which involves a constitutional question, the circuit court of appeals takes jurisdiction, and decides the whole case in the first instance.

In September, 1898, a city passed an ordinance granting to J and his assigns the right for a term of 25 years to use the water and water system of the city to produce power to general electricity, and the right to lay conduits, to erect poles, to string wires, and to maintain and operate them in its streets during this term, on condition that the grantees would return the water to the system undiminished in flow and without pollution; that they would do nothing to impair the efficiency of the water system; that they would complete the driving of a tunnel through a spur of a mountain for the city for the purpose of enlarging its water system and its supply of water; that they would carry its telegraph and telephone wires in their conduits and on their poles, and would furnish the city with a certain amount of electric power and certain electric lights free of cost, and with others at a fixed price during the term of the grant, and that at the end of the term they would vest in the city the ownership of a certain pipe line and any electrical plant they had then constructed to supply the electric lights. Held, that under the general power to manage and control the property of the city, to light its streets and public places, to manage its water system, and to control and regulate the use of its streets, the city council of the city had lawful authority to pass this ordinance.

After the ordinance of September, 1898, had been accepted, and after the grantees had proceeded in the performance of their part of the contract for five months, the city council, in February, 1899, passed an ordinance which, by its terms, repealed the ordinance of September, 1898. Held, the repealing ordinance violated section 10, art. 1, of the constitution, which prohibits the passage of a law impairing the obligation of contracts.

An ordinance of a city passed under the legislative authority of a state is a law of that state, within the meaning of that term in the constitution and statutes of the United States.

A grant by a city of rights and privileges in its streets, parks, public grounds, or water system for private use,-- that is to say, a grant from which neither the city, its citizens, nor the public receive any consideration or derive any benefit,-- is beyond the powers of the municipality, and void.

A city has authority, under its general powers, to grant to private parties for public purposes reasonable rights and privileges in its water system, its streets, its public grounds, and its other public utilities, provided that such grant and its exercise do not materially impair the usefulness of these utilities for the public purposes for which they were acquired or dedicated.

The ordinance of September, 1898, was not for purely private use, but for the public purposes of procuring an enlargement of the water system of the city, of obtaining the use of electric lights for the municipality, and of securing conduits and poles to carry its wires.

The Colorado statute (3 Mills' Ann.St.p. 1144) which provides that the city councils of cities in that state shall have power to erect waterworks, gas works, or electric light works, or to authorize their erection by others, only when such works shall be erected or authorized pursuant to a favorable vote of the taxpayers of the cities, applies only to works erected by the cities themselves or by others under contracts with or for the cities. It has no application to such works erected by private parties for their own use.

A city has two classes of powers, the one legislative, public, governmental, in the exercise of which it acts as a sovereign and governs its people, the other proprietary, quasi private, business, conferred upon it for the private advantage of its inhabitants and itself.

In contracting for the enlargement of its water system, for electric lights for municipal use, and for the use of conduits and poles to carry its wires, a municipality is exercising its proprietary or business powers, is subject to the same rules of law that govern the agreements of private corporations, and its contracts bind its successive sets of officers.

The water system and the other public utilities of a city are held by the municipality and its officers in trust for the public purposes for which they were acquired and dedicated. The city and its officers may not renounce this trust, disable themselves from discharging it, or so divert or impair the public utilities that they become inadequate to accomplish the public purposes for which they were created.

A city and its officers have the authority, and it is their duty, to apply the surplus power and use of public utilities for the benefit of the municipality and its citizens, provided such application does not materially impair their usefulness for the public purposes for which they were created.

A city council has authority, under its general powers, to lease to private parties the use of the water flowing through its water system to enable them to generate power to create electricity, where such lease does not impair the usefulness of the water or the system for the municipal purposes for which they were obtained by the city.

A court of equity will not enforce a forfeiture of the rights and privileges of the grantees in a contract for their failure to complete their performance of it in time, where the party seeking the forfeiture was guilty of the first breach of the agreement, and failed to pay installments due under it while the work was in progress until compelled to do so by judgments of the courts, and had persistently endeavored to revoke and annul the grant, while the grantees were vigorously prosecuting their part of the work under it, which they had, within the time limited by the agreement, substantially performed, although they had not completely finished it.

Guy Le R. Stevick and Charles J. Hughes, Jr. (Henry M. Blackmer and Henry McAllister, Jr., on the brief), for appellant.

W. S. Morris and R. E. Lewis (J. W. Ady, on the brief), for appellee.

Before CALDWELL, SANBORN, and THAYER, Circuit Judges.

SANBORN Circuit Judge.

This is an appeal from a decree dismissing the bill of the Pikes Peak Power Company, a corporation, upon the merits at the final hearing. The suit which culminated in that decree arose in this way: For many years the city of Colorado Springs, the appellee, has derived its supply of water from watersheds on the slopes of Pikes Peak some 19 miles from the city, and more than 6,000 feet above the level of the sea. The city owns more than 4,000 acres of land on these slopes, and it collects the water from rains and melting snows into reservoirs in the mountains, and by open flumes and iron pipes conducts it thence to the city, where it is distributed for the usual municipal purposes. The population and business of the city had so increased in 1895 that the supply of water which it had theretofore drawn from the eastern slopes of Pikes Peak was inadequate, and the city concluded to increase it by deriving an additional store from the western slopes of the mountain. The means devised to accomplish this purpose consisted of a reservoir on West Beaver creek for the collection of the water on the western slopes, and a tunnel at an elevation of about 11,500 feet above the level of the sea, about 6,400 feet in length, through one of the spurs of the mountain, to conduct the water to Middle Beaver creek on the easterly side of the peak, whence it would flow into the flumes and water pipes of the city. Thereupon, on December 27, 1895, Wilson & Jackson, a partnership composed of Charles H. Wilson and George W. Jackson, made a contract with the city to bore this tunnel on or before September 27, 1897. They entered upon the undertaking, but it proved to be far more difficult and expensive than any of the parties had anticipated. A slide of loose rock, or a cave-in, was encountered on the line of the tunnel, which proved an insuperable obstacle to its construction on that line, and compelled the contractors to drive the tunnel on a detour more than 350 feet in length, while the distance on the line of the tunnel from the point of departure from it to that of the return to it was only about 130 feet. The high altitude at which the tunnel was located, the difficulty of transporting fuel, tools, and materials to that height, and developing power to drive and complete it, made its cost several times its contract price. As these obstacles developed, the city aided the contractors by a gift of $11,500, and by extending the time for the completion of the work until September 27, 1898. George W. Jackson became the successor of Wilson & Jackson, borrowed money, and apparently prosecuted the work of driving the tunnel to the best of his ability; but the undertaking became so expensive, and the amount of his indebtedness so great, that h...