Alabama Water Co. v. City of Anniston

• Decision Date: 09 October 1930
• Docket Number: 7 Div. 929.
• Citation: 223 Ala. 355,135 So. 585
• Parties: ALABAMA WATER CO. ET AL. v. CITY OF ANNISTON.
• Court: Alabama Supreme Court

135 So. 585

223 Ala. 355

ALABAMA WATER CO. ET AL. v. CITY OF ANNISTON.

7 Div. 929.

Supreme Court of Alabama

October 9, 1930

Rehearing Denied March 19, 1931.

As Modified on Further Denial of Rehearing June 27, 1931.

Appeal from Circuit Court, Calhoun County; R. B. Carr, Judge.

Bill for specific performance of a contract, for accounting, etc by the City of Anniston against the Alabama Water Company and others. From a decree for complainant, respondents appeal.

Reversed and remanded.

GARDNER and FOSTER, JJ., dissenting.

Statute permitting amendment of bill any time held not intended to abrogate rules of waiver and estoppel (Code 1923, § 6558).

The following is the contract entered into by the parties June 3 1920:

"This agreement entered into this the 3rd day of June, 1920, by the City of Anniston, a municipal corporation of the State of Alabama, of the one part, and the Alabama Water Company, a corporation of the State of Alabama, of the other part.

"Witnesseth:

"1. That the City of Anniston hereby elects to exercise the option given to the City of Anniston, under a contract between the Anniston Water Supply Company and the City of Anniston, made and entered into on the 20th day of June, 1910, to purchase the water works and all property, real, personal, and mixed, mentioned in said contract, together with all improvements made on said water plant since the date of said contract, and all property, rights and contracts since acquired and attached to and forming a part of said water works plant, whether the same be located in the City of Anniston or adjacent thereto.

"2. The property of the Anniston Water Supply Company has been sold and is now owned by the Alabama Water Company, a corporation.

"3. It is agreed that the minimum purchase price of the plant shall be $400,000.00, plus the cost of all extensions of pipe lines, improvements on pumping station and reservoir, and the cost of replacing equipment owned on the 30th day of June, 1910, with new equipment of greater capacity, such cost to be estimated by the difference between the equipment of the same capacity now in use and the equipment of larger capacity which may have been installed. The price to be diminished, however, by a depreciation of 1% per annum from June 20th, 1910, to the date of exercising the right of purchase. The value of all extensions, improvements and so forth above mentioned shall be fixed by arbitration as hereinafter provided.

"4. The City of Anniston will select an arbitrator and the Alabama Water Company will select an arbitrator, within ten days from this date, and the plant and property and books, paper accounts and contracts attached to and pertaining to said water plant shall be turned over to the said arbitrators, who shall at once proceed to fix the price at which said plant may be taken over. In the event of their disagreement the two arbitrators so selected shall choose an umpire and a decision of a majority of the board of arbitrators thus constituted shall be accepted as the award of the arbitrators.

"5. The price of said plant, when determined and fixed as hereinabove provided, the City of Anniston hereby agrees to pay, on or before September 20th, 1920, by assuming the outstanding first mortgage six per cent bonds of the Alabama Water Company to the amount of the full price, not exceeding four hundred and twenty-five thousand dollars ($425,000.00). If the price should exceed four hundred and twenty-five thousand dollars the excess over four hundred and twenty-five thousand dollars shall be paid by the City in cash or in its notes payable to the Alabama Water Company, or its bonds, at the market value of such notes or bonds, the same to mature not later than ten years after date, and shall bear interest payable semi-annually.

Upon the payment of said purchase price in the manner herein stipulated, the said Alabama Water Company agrees to execute and deliver, on or before September 30th, 1920, to the City of Anniston, good and sufficient deed conveying said property to said city.

"In the event the price fixed as hereinabove provided should be less than four hundred and twenty-five thousand dollars, the Alabama Water Company hereby agrees to pay the Equitable Trust Company, for the retirement of its bonds, the difference between the purchase price as determined and $425,000.00, such payment to be made by or before the said City shall have paid the Equitable Trust the amount of its bonds assumed by it. The City of Anniston covenants and agrees to pay the principal and interest of the bonds assumed by it in accordance with the terms of said bonds, and the Alabama Water Company covenants and agrees to pay the interest on all of its bonds now outstanding, in excess of the amount of said bonds assumed by the City of Anniston.

"6. All earnings of the Alabama Water Company up to and including September 30th, 1920, shall be retained by the Alabama Water Company.

"7. It is further agreed that in the event the City should create a Board of Public Works or a Water Commission to operate and manage said water works, that either John B. Weakley, Eugene Fies or W. P. Acker, as the City may determine, shall be a member of such board or commission until the bonds assumed by the City on the purchase of said plant and the notes or bonds given for the excess over $425,000.00 shall have been fully paid, and the City further agrees to pay over to the Equitable Trust Company of New York the trustee under the mortgage of the Alabama Water Company, annually on the first day of December, of each year, the sum of five thousand dollars ($5,000.00), as a sinking fund for the payment and retirement of the bonds of the Alabama Water Company assumed by the City on the purchase of said plant, said sinking fund to be held and applied by the Equitable Trust Company, in accordance with the terms of the deed of trust executed by the Alabama Water Company to the said Equitable Trust Company, securing said bonds.

"In Witness Whereof the City of Anniston has caused this contract to be signed with its corporate name by its Mayor, who is thereto duly authorized, and the said Alabama Water Company has hereunto set its corporate name by its secretary and treasurer, Eugene Fies, who is thereto duly authorized on this day and year herein first above written."

Cabaniss, Johnston, Cocke & Cabaniss, of Birmingham, and Knox, Acker, Sterne & Liles, of Anniston, for appellants.

James F. Matthews, of Anniston, for appellee.

BOULDIN J.

The original bill in this cause was filed August 28, 1920, by the city of Anniston against Alabama Water Company and its mortgagees, for the specific performance of a contract or option to purchase the waterworks system serving the city.

The equity of the bill was upheld on appeal from decree on demurrer. City of Anniston v. Alabama Water Co., 207 Ala. 497, 93 So. 409.

The original bill based its claim to relief on an original option executed June 20, 1910, by Anniston Water Supply Company, predecessor in title of Alabama Water Company, as supplemented by a contract direct with Alabama Water Company of date June 3, 1920.

A plea of non est factum being interposed as to this supplemental contract, the bill was amended by striking it out and proceeding on the original contract and a resolution exercising the city's option to purchase as of July 1, 1920. The equity of the bill as thus amended was again sustained on appeal from decree on demurrer. Alabama Water Co. v. City of Anniston, 215 Ala. 120, 110 So. 36.

Alabama Water Service Company, having succeeded Alabama Water Company pending the suit and subject to the equities of complainant, was made party respondent, together with Central Union Trust Company, its mortgagee.

A third appeal sought to be taken by these new respondents from decree on demurrer was dismissed under Code, § 6080. Alabama Water Service Co. v. City of Anniston, 217 Ala. 271, 116 So. 124.

The present appeal is from final decree adjudicating complainant's right to relief, and ordering a reference to ascertain the amount due to be paid.

On December 13, 1928, after proof taken, respondent Alabama Water Service Company filed an amended answer to the bill as amended, withdrawing all former answers and pleas. Other respondents, Alabama Water Company and Central Union Trust Company of New York, present mortgagee, on same date likewise withdrew all former answers and pleas, and adopted said answer of Alabama Water Service Company.

This amended answer, among other things, reasserted averments which brought again into the case the supplemental agreement of June 3, 1920, alleged it was duly executed or ratified by both parties, the city and Alabama Water Company, and arbitrators appointed by them, who were proceeding to arbitrate the matters submitted to them when the original bill was filled. The proof sustains this phase of the answer.

The bill was never amended so as to again present complainant's right to relief under the original option as supplemented or modified by said contract of 1920.

Appellee insists that respondents, by interposing a sworn plea of non est factum in the early stages of the litigation, a matter peculiarly within respondents' knowledge, thus leading to the amendment resting complainant's case upon the original option, are now estopped to shift position and insist complainant's equities are to be determined by the supplemented or modified agreement of 1920.

The principle is recognized that a party who has in one judicial proceeding successfully maintained one position, or otherwise obtained an advantage, is estopped to assume a different and incompatible position in a later proceeding to the hurt of his adversary. McQuagge v. Thrower, 214 Ala. 582 108 So. 450;...