Mayor and Aldermen of the City of Vicksburg v. Vicksburg Waterworks Company

• Decision Date: 21 May 1906
• Docket Number: No. 133,133
• Citation: 6 Ann. Cas. 253,50 L.Ed. 1102,202 U.S. 453,26 S.Ct. 660
• Parties: MAYOR AND ALDERMEN OF THE CITY OF VICKSBURG, Appt. , v. VICKSBURG WATERWORKS COMPANY
• Court: U.S. Supreme Court

202 U.S. 453

26 S.Ct. 660

50 L.Ed. 1102

MAYOR AND ALDERMEN OF THE CITY OF VICKSBURG, Appt.,

v VICKSBURG WATERWORKS COMPANY.

No. 133.

Submitted December 13, 1905.

Decided May 21, 1906.

Messrs. J. C. Bryson, M. Dabney, H. C. McCabe, and L. W. Magruder for appellant.

[Argument of Counsel from Pages 454-456 intentionally omitted] Mr. S.S. Hudson, Mr. Murray F. Smith and Mr. J. Hirsh for appellee:

[Argument of Counsel from page 456 intentionally omitted] Mr. Justice Day delivered the opinion of the court:

This case was before this court at the October term, 1901, and is reported in 185 U. S. 65, 46 L. ed. 808, 22 Sup. Ct. Rep. 585. It was then here upon the question of jurisdiction, and it was held that it presented a controversy arising under the Constitution of the United States, such as gave the circuit court jurisdiction. There was no diversity of citizenship, and the bill was filed by the Vicksburg Waterworks Company, a corporation of the state of Mississippi, against the mayor and aldermen of the city of Vicksburg, a municipal corporation of the same state. In view of the full statement of the contents of the bill and the amended bill in the case, as reported in 185 U. S., it is unnecessary to repeat it. On the present appeal a motion to dismiss or affirm was made, which was passed, to be heard with the merits. We regard the decision of this court, when the case was here at the former term, as settling the question of jurisdiction, and affirmatively determining that, upon the bill and amended bill, the complainant alleged a case which involved the application of the Constitution of the United States, and appealable to this court, within § 5 of the act of March 3, 1891, as amended. 26 Stat. at L. 827, chap. 517, U. S. Comp. Stat. 1901, p. 549.

The suit was brought by the waterworks company, claiming an exclusive right, as against the city, under a contract with it for the construction and maintenance for a period of thirty years of a system of waterworks, which exclusive contract, it was alleged, would be practically destroyed if subjected to the competition of a system of waterworks to be erected by the city itself, which was in contemplation under authority of an act of the legislature of Mississippi, authorizing the mayor and aldermen of the city of Vicksburg to issue bonds to the amount of $375,000 to purchase or construct a waterworks system and a sewer system, and for certain other purposes. That act, among other things, required the vote of the electors of the city upon the question of issuing bonds and constructing or buying waterworks; an election was held, and it was voted by a majority of the votes cast that the city should issue bonds to the sum of $150,000 to purchase or construct waterworks for the city. A resolution was passed by the municipal authorities, instructing the mayor and aldermen to notify the waterworks company that liability was denied upon the contract for the use of the waterworks hydrants, and that from and after August, 1900, the city would pay a reason-able compensation for the use of said hydrants. A bill was filed in the equity court in Warren county, Mississippi, averring that the original contract to which the waterworks company claimed to have succeeded was null and void; that the mayor and aldermen had exceeded their powers in making the contract for thirty years; that rates charged to consumers were exorbitant and illegal; that the mayor and aldermen, at a meeting held on November 5, 1900, had resolved that they no longer recognized any liability under said contract; that the Vicksburg Water Supply Company (a former holder of said contract) and the complainant had no rights in said contract, and the city was entitled to have the same canceled and snnulled. And it was held in 185 U. S. that the facts, taken together, presented something more than a case of mere breach of private contract and disclosed an intention and attempt, by subsequent legislation of the city, to deprive the company of its rights under the existing contract, and it was said: 'Unless the city can point to some inherent want of legal validity in the contract, or to some disregard by the waterworks company of its obligations under the contract as to warrant the city in declaring itself absolved from the contract, the case presented by the bill is within the meaning of the Constitution of the United States and within the jurisdiction of the circuit court, as presenting a Federal question.' And it was further held that it was a valuable feature of equity jurisdiction to anticipate and prevent threatened injury, and the conclusion was reached that the allegations of the bill made a case for an injunction. The case was thus brought within § 5 of the act of March, 1891, as one in which the appeal is directly to this court. See also upon this point Penn Mut. L. Ins. Co. v. Austin, 168 U. S. 685, 42 L. ed. 626, 18 Sup. Ct. Rep. 223. The motion to dismiss will be overruled.

Upon the case going back to the circuit court an answer was filed raising issues as to whether the complainant had accepted and performed the agreement in their contract to supply water to the city, and denying the right of the complainant to have and to own the contract and the authority of the city to make an exclusive contract, and detailing other matters not necessary to further set forth.

Certain questions of fact as to the character of the water wupplied by the complainant, the pressure maintained, and similar questions were decided by the circuit court in favor of the appellees. An examination of the record makes it sufficient for us to say that we find no reason for disturbing the conclusions of the circuit court upon these questions.

The decree in the case below was in favor of the waterworks company, maintaining its right to the contract for hydrant rentals, and enjoining the city, during the period of the contract, from constructing a waterworks system of its own, and requiring the city to construct a sewer for the disposal of house sewage from the city.

The assignments of error necessary to be considered are:

1. As to the alleged error of the court below in permitting a corporation known as the City Waterworks & Light Company, which had intervened in the case, to withdraw from the files its original bill in the nature of a supplemental bill, and striking out certain testimony which had been taken concerning the same.

2. In enforcing the contract with the city in favor of the complainant, and restraining the city from erecting waterworks of its own during the term covered by the contract with the complainant.

3. In requiring the construction of the sewer by the city.

We shall proceed to notice these in the order named.

The City Waterworks & Light Company, on December 2, 1903, filed its petition praying to be admitted as a party complainant in the cause, and set up that it was the owner of the contract sued upon. To this petition the city answered, denying that the City Waterworks & Light Company had purchased, by deed or otherwise, or owned the property, real and personal, of the complainant, the Vicksburg Waterworks Company, and denying that the City Waterworks & Light Company had any interest in the subject-matter of the suit or should be admitted as a party complainant therein. The City Waterworks & Light Company then filed its original bill in the nature of a supplemental bill, on May 5, 1904, after the city had denied that it had any interest in the suit. On May 13, 1904, it filed a motion asking leave to withdraw its petition and bill from the files, which motion was granted by the court, and the motion of the Vicksburg Waterworks Company to withdraw from the files its written consent to the filing of the bill was also sustained, and the court granted the withdrawal of the petition, bill, exhibits, and written consent. Thereupon the city offered a supplemental answer, and asked the court for leave to file the same. This answer made allegations setting forth the transfer of the contract to the City Waterworks & Light Company, and asked for a continuance of the cause, with leave to take testimony to support the averments of this supplemental answer. The court, on the same day, May 13, 1904, overruled the city's motion for leave to file the supplemental answer and for continuance, with leave to take testimony in support thereof, and proceeded to hear the case upon the original pleadings and proofs. It also permitted the withdrawal of certain testimony referring to the City Waterworks & Light Company and the transfer of the contract to it. In view of the action of the court upon the pleadings as to the City Waterworks & Light Company, this testimony had become immaterial.

In the action of the court just recited we can find no ground for a reversal. The City Waterworks & Light Company had come into the case claiming an ownership of the contract which was denied by the city; certain testimony was filed concerning this claim of the company. We think it was discretionary with the court to permit the withdrawal of these pleadings and the suppression of this testimony, and it was likewise within its discretion to permit or deny a further answer by the city setting up the alleged transfer of ownership. These matters, except in cases of gross abuse of discretion, are within the control of the trial court. Chapman v. Barney, 129 U. S. 677, 681, 32 L. ed. 800, 801, 9 Sup. Ct. Rep. 426; Dean v. Mason, 20 How. 198, 204, 15 L. ed. 876, 878.

The principal controversy in the case is as to the correctness of the decree of the court below restraining the city from erecting waterworks of its own within the period named in the contract, which decree proceeded upon the theory that the city had excluded itself from erecting or maintaining a system of waterworks of its own during that period. The contract for the construction of the waterworks was originally made on November 18, 1886, by an ordinance of that date, granting...