173 F. 502 (N.D.N.Y. 1909), Risley v. City of Utica

Citation:173 F. 502
Party Name:RISLEY et al. v. CITY OF UTICA et al.
Case Date:October 23, 1909
Court:United States Courts of Appeals, Court of Appeals for the Second Circuit
 
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Page 502

173 F. 502 (N.D.N.Y. 1909)

RISLEY et al.

v.

CITY OF UTICA et al.

United States Circuit Court, N.D. New York.

October 23, 1909

Page 503

Risley & Love and John D. Kernan, for complainants.

Jones, Townsend & Rudd, for defendant Consolidated Water Company of Utica.

RAY, District Judge.

Seven grounds of demurrer are alleged, viz.:

'(1) That the complaint does not state facts sufficent to constitute a cause of action against this defendant.

'(2) That the bill of complaint on its face shows no jurisdiction in this court, the amount involved being less than $2,000.

'(3) That it shows no question arising under the Constitution of the United States of America, or any act of Congress, and that no federal question is involved.

'(4) The complaint on its face shows a want of equity in the complainant's alleged case.

'(5) The complaint shows that the complainants have a whole, complete, and adequate remedy at law.

'(6) That said bill of complaint is multifarious, in that it is exhibited against these defendants and several other defendants in the bill for several distinct

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and independent matters and cases which have no relation to each other, in which the defendant is in no way interested, and ought not to be entertained.

'(7) That persons are united as complainants who have no joint or common interest in obtaining the same relief.'

The parties to this suit are all citizens and residents of the state of New York; hence there is no diversity of citizenship. The complainants allege that they, respectively, are the owners of real estate situated in the city of Utica, N.Y., liable to taxation; that such property has been and is being taxed; that the taxes imposed, and being imposed, and threatened to be imposed and collected, are illegal, and assessed and levied by the officials of the city of Utica under a void act of the Legislature, if it authorizes a certain contract hereafter referred to, and without any warrant of law whatever, if such act of the Legislature does not authorize the contract; that such taxes are a lien on and that such property has been levied upon and is subject to be sold to pay such taxes, and a cloud on title is thereby created; and that their property is being taken in violation of the Constitution of the United States, in that they are deprived of the equal protection of the laws, and are being deprived of their property by the imposition of such tax and its collection without due process of law by the state of New York, and that their property is being confiscated. There are other claims made which will be referred to later.

The allegations of fact contained in the bill demurred to must be taken as true. No so of conclusions, unless they necessarily follow from facts stated. The city of Utica is one of the cities of the state of New York of the second class, existing under the provisions of chapter 18, p. 28, of the Laws of 1862, and the acts amendatory thereof and supplementary thereto. The Utica Waterworks Company became a corporation of the state of New York under the provisions of chapter 154, p. 252, of the Laws of 1848, and the acts amendatory thereof. At the time of the filing of the bill the defendant George Davis was the collector of the Thirteenth ward in said city, and held a warrant for the collection of certain city taxes levied on and against the property of one of the complainants situated in said ward. By chapter 393, p. 937, of the Laws of 1867, it was enacted:

'The common council of the city of Utica are hereby authorized and empowered to make a contract with the Utica Waterworks Company, and to fix and agree upon the sum to be paid annually therefor, for a supply of water for the extinguishment of fires, and shall lay and extend its pipes and conduits in such streets as the common council shall designate, and provide suitable reservoirs to constantly supply said city with sufficient water for the extinguishment of fires. Said sum fixed as the annual sum to be paid to said Utica Waterworks Company for a supply of water for the purpose of extinguishing fires shall be added in each year to the tax authorized to be raised by the forty-seventh section of the city charter of said city of Utica, and shall be collected therewith, and by the same power and authority.'

On the 19th day of May, 1968, the said Utica Waterworks Company, acting under said law and by virtue thereof, entered into a contract with said city of Utica to supply water for the purposes therein mentioned. The material provisions of such contract are in substance as

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follows: The company agrees (1) to furnish water for the said city for the extinguishment of fires; (2) to lay and extend its pipes, etc., in the streets designated on a map and presented to the common council; (3) to provide suitable reservoirs to constantly supply said city with sufficient water for the extinguishment of fires. The city agrees to pay $10,000 annually on the 15th day of November, and also to pay one-half of all taxes assessed on the said company or its works or property within the limits of the city and taxes thereon in excess of $1,000. If the city shall determine to extend the pipes and conduits beyond the points designated on the map on any street, then the company is to do such work, and the city is to pay 7 per cent, upon the cost of such extension. The city is also to have water from the pipes of the company for municipal purposes without payment of water rent. The company is also to erect fountains in the public streets and furnish same with water for drinking purposes.

The bill of complaint then contains this broad allegation:

'Your orators further allege, upon information and belief, that said contract in its various provisions was not authorized or made in accordance with chapter 393 of the Laws of 1867, but all of its provisions were made in hostility to the provisions of said act, and contrary thereto, and that said contract was made without authority of law, and contrary to the law, and contrary to the rights of the complainants in this suit.'

The West Canada Waterworks Company was organized in May, 1898. The common council of the city of Utica granted it permission to lay pipes, etc., in the streets of the city. In such consent it was stipulated that such company would furnish water to the city and its inhabitants for 25 per cent. less than was being charged by the Utica Waterworks Company for a corresponding service. In November, 1899, the Consolidated Water Company was organized. Thereupon said West Canada Company sold and assigned all its property rights and privileges, except such consent and its obligation thereunder, to the Consolidated Company, and the Waterworks Company also sold all its property rights and privileges to the Consolidated Company. The Consolidated Company claims that the contract with the city, above mentioned, passed to it by such sale and assignment from the Waterworks Company.

The bill of complaint alleges that such contract and agreement was nonassignable, and did not pass to the Consolidated Company, and it gained no rights thereunder as against the city or its inhabitants; also that the purpose of the Consolidated Company was to create, foster, and promote a monopoly for the supplying of water to said city for domestic and fire protection purposes, and to claim and enforce payment under said contract, and that it has received large sums of money, amounting to many thousands of dollars each year, from said city and its taxpayers under such claim under such contract, and that same has been demanded, collected, and received by it and paid to it illegally, in violation of law, and contrary to the rights of the said city and its citizens and taxpayers under the Constitution of the United States, and to that extent has confiscated the property of the taxpayers of said city of Utica, in violation of the Constitution of the United States.

The bill alleges that the city authorities have neglected and refused,

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unjustly, unnecessarily, and in violation of the said constitutional rights of the complainants, to extend or have extended water mains and pipes to, or onto, or through the streets in said city where they have property protection against fire, although requested so to do, so that they and their said property are without any protection whatever against fire; that the money collected by tax for fire protection purposes is largely to pay said Consolidated Company for furnishing water for such purposes to a part of the city only, and to a part of its taxable property owners only, and that such tax is being assessed and levied and collected in defiance and violation of their rights under the Constitution of the United States.

The bill sets out at considerable length and in considerable detail the imposition and collection of such taxes for seven years past, and the present assessment and levies of such taxes for such purposes, in the city of Utica, and the enforced collection of same in some instances, and in others, when paid, alleges that same were paid in ignorance of the facts and under a mutual mistake of fact, giving the amount of such taxes assessed and levied and paid or sought to be collected by levy and sale of their property on which same has become a lien. The bill alleges the annual assessment and collection and threatened collection of taxes on all taxable property in said city, including that of the complainants, to pay one-half of the taxes levied on the property of said Consolidated Company, and that none of its has been assessed or imposed to pay any tax on the property of the Utica Waterworks Company; no tax being assessed or levied on its property.

It is true that there is no direct...

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