Los Angeles City Water Co. v. City of Los Angeles

Decision Date31 May 1898
Docket Number734.
PartiesLOS ANGELES CITY WATER CO. et al. v. CITY OF LOS ANGELES et al.
CourtU.S. District Court — Southern District of California

[Copyrighted Material Omitted]

White &amp Monroe and J. S. Chapman, for complainants.

W. E Dunn and Lee & Scott, for defendants.

WELLBORN District Judge.

This suit, which is now under submission on the pleadings and an agreed statement of facts, was brought to annul an ordinance of the council of the city of Los Angeles adopted February 23, 1897, fixing water rates during the year commencing July 1, 1897, and ending June 30, 1898, on the ground that said ordinance impairs the obligation of the contract hereinafter mentioned, and is therefore repugnant to the constitution of the United States. The material facts of the case are these;

On July 22, 1868, the city of Los Angeles, as party of the first part, and John S. Griffin, P. Beaudry, and Solomon Lazard, as parties of the second part, entered into a contract whereby said city, for the considerations below indicated, leased its water works to said Griffin, Beaudry, and Lazard, and their assigns, for a term of 30 years, with the right to lay pipes in the streets, and sell and distribute water for domestic purposes to the inhabitants of said city, and to receive the profits thereof, and with the additional right to take water from the Los Angeles river at a point at or above the present dam: provided, that the said parties of the second part should at no time take from said river, for the use of said water works, more than 10 inches of water without the previous consent of the mayor and common council of said city, and that they would within 60 days from the date of the contract select the point where the water should be taken from said river; and the city bound itself not to make any other lease, sale, contract, grant, or franchise to any person, corporation, or company for the sale or delivery of water to the inhabitants of said city for domestic purposes during the continuance of the contract, and reserved the right to regulate water rates as follows:

'Always provided that the mayor and common council of said city shall have, and do reserve, the right to regulate the water rates charged by said parties of the second part, or their assigns: provided, that they shall not so reduce such water rates, or so fix the price thereof, to be less than those now charged by the parties of the second part for water.'

For the lease and grants aforesaid the parties of the second part undertook and promised to pay said city a yearly rental of $1,500; to cancel certain claims of said parties against said city, amounting to about $8,000; to lay down in the streets of said city 12 miles of iron pipes, of sufficient capacity to supply the inhabitants of said city with water for domestic purposes, and extend said pipes as fast as the citizens desiring water for domestic purposes would agree to take sufficient water to pay 10 per cent. per annum upon the cost of such extensions, and erect one hydrant, as protection against fire, at one corner of each crossing of streets where pipes were, or might thereafter be laid; to erect an ornamental fountain on the public plaza, at a cost not to exceed $1,000; to construct and erect within two years such reservoirs, machinery, ditches, and flumes as would secure to the inhabitants of said city a constant supply of water for domestic purposes; to furnish water free of charge for the public school houses, hospitals, and jails; to keep in repair all of said improvements at the cost and expense of the parties of the second part for said term of thirty years; and to return said water works to said party of the first part, at the expiration of said term, in good order and condition, reasonable wear and damage of the elements excepted, upon payment to said parties of the value of the aforesaid improvements, to be ascertained as provided for in the contract; to give a bond in the sum of $20,000 for the performance of said contract; and to pay all state and county taxes assessed upon said water works during said period of 30 years. Griffin, Beaudry, and Lazard applied for and procured said contract on behalf and for the benefit of themselves and other persons, with the intention of forming a corporation to carry out said contract, and afterwards, about the middle or latter part of August, 1868, themselves and said other persons being the incorporators, organized, under the laws of the state of California, the Los Angeles City Water Company, for the purpose of supplying the inhabitants of said city with water for domestic purposes, etc., under the terms of said contract, and assigned all their rights and franchises under said contract to said company, by a written instrument dated June 12, 1869, and recorded in the office of the recorder of said county of Los Angeles June 15, 1869. On April 2, 1870, the legislature of California passed an act, hereinafter set forth, in terms ratifying and confirming said contract.

Griffin, Beaudry, and Lazard did nothing personally in carrying out said contract, or constructing or maintaining said water works; but said company, after it was organized, took possession of said water works, and has performed all of the above-mentioned obligations of said contract, except the one providing for the return of the water works at expiration of lease, and in such performance has laid 320 miles of pipe, erected over 500 hydrants for protection against fire, and constructed 6 reservoirs, with an aggregate capacity of nearly 66,000,000 of gallons, and is now, as it has been at all times since the contract was made, furnishing the city of Los Angeles with water for the extinguishment of fires, and for the public schools, hospitals, and jails in said city, free of charge. The aforesaid extensions of the water works were rendered necessary by the growth of said city, whose population in 1868 was between 5,000 and 6,000, and is now about 103,000. During the whole of the year 1868 the territorial limits of the city of Los Angeles were as follows: Four square leagues, in a square form, the center of which was the center of the old pueblo plaza. About 1872 the limits were extended 420 yards south of the former south boundary; and within the past three years, and prior to July, 1897, the limits were further extended so as to take in between 10 and 15 square miles of additional adjoining territory. Immediately after the extension of the said limits the Los Angeles City Water Company began to extend its pipes over the said addition to the city as the same was settled up and improved, and ever since has been, and is now, furnishing water to the people in said district added to the original territory of the city, and, upon the demands of the city council, erected fire hydrants within the said additional territory, and furnished water free of charge, and has in all respects continued to lay pipes, erect fire hydrants, and furnish the inhabitants with water for domestic uses, in like manner as it has conducted the same business within the original limits of the city as established by the act incorporating it. And so with the more recent extensions of the city limits, to wit, those made within the last three years, the company has also extended its pipes in portions of those limits, and furnished water in the same way. The quantity of water required to supply the domestic wants of the people of said city is 1 inch of water, measured under a 4-inch pressure, to every 100 inhabitants. To meet the increased demands upon it for water under said contract, said company has, among other things, purchased the system known as the 'Beaudry System of Water Works,' and also certain water rights in the Arroyo Seco, and conducted water from the Arroyo Seco into the city on the east side of the Los Angeles river, and has been furnishing the inhabitants of that portion of the city with water from said system, and also acquired the stock of the corporation known as the East Side Spring-Water Company,-- the same mentioned in paragraph 10 of the complaint. In the growth of the city, its settlement extended to localities of higher elevation than those occupied by its inhabitants at the time of said contract, and the point originally selected for the diversion of the water of the Los Angeles river for supplying the city and its inhabitants, as in said contract provided, was so located in said river that it was impracticable to there maintain dams and diversion works that would not occasionally be swept away or rendered useless by floods; and the surface water of the river after severe storms became muddy, and unfit for supplying the inhabitants with water for domestic uses; and in the year 1889 the Crystal Springs Land & Water Company made excavations in the places referred to in the bill of complaint, and laid the pipes therein as alleged; and the water that has been used by the Los Angeles City Water Company for supplying the city with water as provided in said contract has ever since been obtained from that source, except that from time to time a further supply of water has been taken from the Los Angeles river in order to supply said inhabitants, which diversions have been at or near the place where the said underground pipes are laid; and that by these means the water can be delivered to the higher elevations, and the underground waters, as to quality and amount, are thus protected against the influences of floods.

The Los Angeles City Water Company, ever since its incorporation, has taken more than 10 inches of water, measured under a 4-inch pressure, from the Los Angeles river; and the amount taken has increased with the increase of the population of the city, and the demands of the municipality itself for water for...

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