229 U.S. 123 (2029), City and County of Denver v. New York Trust Company

Citation229 U.S. 123, 33 S.Ct. 657, 57 L.Ed. 1101
Party NameCity and County of Denver v. New York Trust Company
Case DateMay 26, 1913
CourtUnited States Supreme Court

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229 U.S. 123 (2029)

33 S.Ct. 657, 57 L.Ed. 1101

City and County of Denver

v.

New York Trust Company

United States Supreme Court

May 26, 1913

CERTIORARI TO THE CIRCUIT COURT OF APPEALS

FOR THE EIGHTH CIRCUIT

Syllabus

The exceptional power of this Court to review, upon certiorari, decisions of the circuit court of appeals on an appeal from an interlocutory order is intended to be, and is, sparingly exercised; that power does exist, however, in a case where no appeal lies from the final decision of that court.

While the jurisdiction of the Circuit Court in a case where diverse citizenship exists may also rest upon the fact that the case is one arising under the Constitution of the United States, in which case there is an appeal from the judgment of the circuit court of appeals, that is not the case where the alleged infractions of the Constitution are without color of merit, or are anticipatory of defendant's defense.

A suit to enforce a contract between a municipality and a water company for the purchase, as is claimed, by the former of the water plant of the latter and to enjoin the city from constructing another plant, is not, without more, a case arising under the Constitution of the United States. In such a case, the decision of the circuit court of appeals is final, and the writ of certiorari may be exercised.

On a review of an order of the circuit court of appeals granting an injunction in an equity case, this Court is not confined to considering the Act of granting the injunction, but if it determines that there is any insuperable objection to maintaining the bill, it may direct a final decree dismissing it.

The various ordinances of the City of Denver, Colorado, granting and relating to the franchise to the Denver Union Water Company considered and construed, and held that they did not require the city, at the expiration of twenty years, to exercise either the option to renew or the option to purchase reserved in the franchise ordinance, nor did they preclude the city from erecting its own plant.

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Where a municipal ordinance grants a franchise to such extent as the city may lawfully grant it, the term is not in doubt if the city charter expressly limits the term of all such grants.

A limitation in the charter on grants by the municipality is as much part of an ordinance subsequently passed as though written into it.

An ordinance providing for appraisal of a water plant and for submitting to the electors whether the contract shall be extended or the plant purchased at the appraised value does not amount to an election to purchase the plant.

Where the franchise of a water company has expired and the city has lawfully refused to purchase the plant at the appraised value, a charter amendment permitting the municipal authorities to offer the company less than such value and, in case of nonacceptance, to erect a municipal plant does not violate the due process clause of the Fourteenth Amendment by subjecting the company to the alternative of accepting less than value for the plant or having it ruined by construction and operation of the municipal plant.

The equal protection provision of the Fourteenth Amendment does not prevent a city from adopting a scheme of municipal ownership as to a single public utility, and a charter provision which prohibits franchises for that purpose does not violate the equal protection provision of the Fourteenth Amendment.

A provision in regard to the acquisition of a municipal water plant held in this case not to be a revision in extenso of the city charter, but only an amendment thereto, and also held that none of the objections to the adoption of the amendment to the charter of the City of Denver providing for erection of a municipal water plant are tenable.

187 F. 890 reversed.

The facts, which involve various elements of a controversy between the City of Denver, Colorado, the Denver Union Water Company and the New York Trust Company, trustee of bonds of the said company, and the construction and validity of the contracts and ordinances and statutes relating to the water supply of Denver, are stated in the opinion.

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VANDEVANTER, J., lead opinion

MR. JUSTICE VAN DEVANTER delivered the opinion of the Court.

This suit presents a threefold controversy, to which the New York Trust Company (a New York corporation), the City and County of Denver (a municipal corporation in Colorado), and the Denver Union Water Company (a Colorado corporation), are the principal parties. They are respectively the successors of similar corporations whose acts, together with their own, created the situation out of which the controversy arose, but it will be convenient to treat them as if they were the original participants in all those acts. Although formerly controlled by a charter enacted by the legislature of the state, the city, in pursuance of an amendment of the state constitution, came in 1904 to be governed by a charter framed and adopted by the people of the city, and over which they possessed an exclusive power of alteration and amendment. Laws 1889, p. 124; Laws 1893, p. 131; Const. Art. 20, Rev.Stat. 1908, p. 55.

By the charter from the state legislature (Laws 1889), the city was given power (§ 9) "to construct or purchase

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waterworks for the use of the city," and generally to do whatever was "needful . . . in order to supply the city with water for fire, irrigating, domestic, and other purposes," subject to the qualification (§ 12) that "all franchises or privileges" granted by the city should "be limited to twenty years from the granting of the same." April 10, 1890, while that charter was in force, the city, by an ordinance designated as No. 44, and duly accepted by the water company, granted to the latter, its successors and assigns, the right and privilege of laying [33 S.Ct. 660] down, continuing, and maintaining pipes and other apparatus for the conveyance and distribution of water along and through designated streets, alleys, and public places of the city, "to such extent as the city may lawfully grant the same," and subject to termination as therein provided. The ordinance contained various provisions regulatory of the right and privilege so granted, the duty of the water company to supply water for private use and for fire and other public purposes, the rates to be charged private users, and the hydrant rentals to be paid by the city. There were also the following sections:

SEC. 11. At the expiration of the period of twenty years from and after the date of the passage and approval of the ordinance, in case the city shall then elect so to do, the said works may be purchased by the said city, and in case the parties cannot agree, after such election, upon the price to be paid by the city for the waterworks of the said company, its successors and assigns, then their fair cash value shall be determined by arbitration, by five disinterested persons, none of whom shall be residents of Denver, two of them to be chosen by the city, two by the company, and the fifth by the four first chosen, and in case of failure on the part of the company to name arbitrators for the period of thirty days after the city shall have named arbitrators and notified the company so to do, the city may apply to any court having equity

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jurisdiction in the county in which the City of Denver shall then be situated for the appointment of two persons of the qualifications aforesaid as such arbitrators, and the court may thereupon appoint two persons, who shall act with the same force and effect as if appointed by the company, and the decision of a majority of said board shall be final and binding upon both parties, and upon the payment, or tender of payment, by said city, the said company shall convey to said city all of its property, real or personal, easements, rights and privileges, and thereafter all franchises, rights, and privileges which have been at any time theretofore granted said company its successors, or assigns, and which it may then possess, shall cease and be at an end.

SEC. 12. At the expiration of the said period of twenty years, the said city may at its election, renew the contract hereby made, by ordinance to that effect, for a like period of twenty years, but at a price for hydrant rental 10 percent less than mentioned in section 10 hereof, for the period remaining after the ten years after May 1st, 1891 and for successive periods of twenty years at the price last aforesaid, as often and as long as the city may choose. This section is conditioned, however, upon the full performance by the city of the provisions of section 2 hereof.

SEC.19. This ordinance, when the same shall be in writing accepted by the Denver Water Company, becomes a contract between the City of Denver and the said the Denver Water Company, its successors and assigns, and the same shall, as to every provision herein contained, as fully bind and inure to the benefit of the successors and assigns of the said the Denver Water Company as to the said company. And it is expressly understood that, by the acceptance of this ordinance, the said the Denver Water Company loses no rights in regard to the occupation of the streets, alleys, and public places, or as to the rights of any other person or persons thereto which it now

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possesses, but the same are hereby recognized and confirmed, and are to be deemed independent of, and not merged in, any grant in this ordinance elsewhere contained.

SEC. 20. A ll mains, pipes, valves, and other apparatus now owned by said the Denver Water Company, and composing its plant, and all such mains, pipes, valves, hydrants, and other apparatus as said the Denver Water Company, its successors or assigns, shall hereafter lay down or set in or upon any of the streets, alleys, or other public places within said city shall be and remain the sole and absolute property of...

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