City of Austin v. Bartholomew

• Decision Date: 26 March 1901
• Docket Number: 894.,882
• Citation: 107 F. 349
• Parties: CITY OF AUSTIN v. BARTHOLOMEW et al. NALLE v. CITY OF AUSTIN.
• Court: U.S. Court of Appeals — Fifth Circuit

107 F. 349

CITY OF AUSTIN v. BARTHOLOMEW et al.

NALLE v. CITY OF AUSTIN.

Nos. 882, 894.

United States Court of Appeals, Fifth Circuit.

March 26, 1901

On April 13, 1882, the city of Austin entered into a contract with the City Water Company, which contract is the basis of this suit. That contract is set out in full in the statement of facts in the case of Bartholomew v. City of Austin, 29 C.C.A. 568, 85 F. 359, and it will consequently be referred to here when necessary without incumbering the statement of the case or the opinion with the entire contract. The City Water Company constructed its waterworks and complied with its contract with the city of Austin, so far as the record shows, without complaint, until June 28, 1887, when the Austin Water, Light & Power Company organized, and purchased and absorbed the City Water Company. After this latter date the Austin Water, Light & Power Company continued to carry out the contract with the city of Austin, as transferee and assignee of the City Water Company and the city paid and it received the contract price for the hydrants provided in the contract. In the year 1895 the city of Austin completed the erection of waterworks of its own and from and after the 31st day of December, 1895, refused to pay the water, light and power company the rentals for hydrants as stipulated in the contract, or any part of the same. On the 10th day of July, 1893, Joseph Spence was appointed receiver of the Austin Water, Light & Power Company by the circuit court of the United States for the Western District of Texas, and said Joseph Spence was afterwards succeeded as such receiver by E. C. Bartholomew, who was in turn succeeded, after a brief period of joint receivership by Joseph Nalle, the present receiver. The city having refused to pay rent, as stated, for the hydrants Bartholomew, as receiver, on the 9th day of January, 1897, brought suit against the city of Austin to recover the rent of 100 hydrants at $100 each per annum, 42 hydrants at $50 each per annum, and 25 hydrants at $50 each per annum, for the year 1896. This case came on to be heard before the circuit court, when a demurrer to the plaintiff's declaration was sustained on the ground that the original contract between the City Water Company and the city of Austin created a monopoly, under the constitution of the state of Texas, and was consequently void, and no recovery could be had thereunder. This decision was brought by writ of error to the circuit court of appeals, and this court, in the case of Bartholomew v. City of Austin, above referred to, reversed the judgment of the court below and remanded the case. After the case was thus remanded the plaintiff filed his first amended original petition, in which he claimed the same rentals claimed in the original bill for the year 1896 for 1897 and 1898, and in addition thereto added a count or additional claim for general damages in the sum of $625,000 for breach of contract on the part of the city, in preventing him from supplying the inhabitants of the city with water. When the case as thus amended came on to be heard in the circuit court at the adjourned term in May, 1899, it resulted in a verdict and judgment for the plaintiff in the sum of $39,925. The amount of this verdict and judgment was for the rental of 100 hydrants for the years 1896, 1897, and 1898 at $100 each per year, and for the rental of 42 hydrants for the same period at $50 each per year. The court rejected by its rulings during the trial and in its charge the claim for the rental of 25 hydrants, and also for general damages for breach of contract on the part of the city, submitting to the jury the question of the right of the receiver to recover for the 100 hydrants at $100 each per year, and the 42 hydrants at $50 each per year. The charge of the court, which largely raises the questions involved, was as follows: 'Now, you gentlemen have been advised during the progress of the trial of the issues involved in this suit. You know it is a suit on a contract, and plaintiff seeks to recover on the contract. That contract is what we would call on the one side, on the part of the plaintiff, 'executory'; that is, to be executed from day to day, from time to time. It has been partially executed, but still, in some of its particulars, is executory on the part of the plaintiff. Now, there are three issues discussed by the gentlemen on either side of this case, and on these three issues I will now suggest to you what the views of the court are: (1) The court is of opinion that the Austin Water, Light & Power Company, who is plaintiff in this suit through its receiver, was the successor generally, by operation of law, of the City Water Company, and also successor to the burdens, mutualities, and reciprocities of the contract between the city of Austin and the City Water Company, which preceded the coming into life of the Austin Water, Light & Power Company, and the successor of the City Water Company for the mutualities of the old company. The contention of the defendant is that, although these propositions be true, yet as matter of law the city has never consented to enter into and be bound by any reciprocities or mutualities of that contract. On that issue I charge you that the city is bound, and you will so find. (2) Passing from that issue to the second one, as to whether or not the plaintiff in this suit has alleged, and is bound by the allegations, that the contract has been breached by both sides, it is necessary for me to charge you on that point. It may be that in the mind of the city, or in the purpose of the city, in some degree, there was an effort to breach the contract. It may be, to some extent if not entirely, that the contract was breached; but that did not destroy the right of the plaintiff in this suit to go on with the contract from its standpoint, and perform its obligations and respond to its duties and recover on the contract. Therefore on that issue I charge you with the plaintiff. (3) Now, the third is the one undisposed of, because my view of the law may not be sufficient to dispose of it, and I will charge you on it. The third is whether or not the plaintiff company complied substantially with its obligations evidenced in the contract. On that issue there is some conflict in the statements of witnesses, and upon that issue you would be allowed to find one way or the other; and on that I charge you, in the line of plaintiff's requested charge, this: 'You are instructed, if you believe from the testimony that plaintiff has maintained during the years 1896, 1897, and 1898 the system of waterworks in his hands as receiver in a condition of efficiency, as to pressure and amount of water, equal to its condition when said plant was accepted by defendant as in compliance with said contract, and was during said period reasonably equipped to furnish, and did during said time tender to the defendant, all the water called for by the contract, in substantial compliance with its terms, then you will find for the plaintiff the hydrant rentals sued for on 100 hydrants at rate of $100 per year per hydrant, payable semiannually, and on 42 hydrants at $50 per annum per hydrant, payable semiannually, for said years, with interest at the rate of 6 per cent. per annum; the amount of said hydrant rentals, with interest at 6 per cent. per annum, calculated to this day, being $-- .' On the 25 hydrants claimed for under section 8 of contract, I charge you that you will find nothing one way or the other in your verdict. I have taken up the three issues that I thought proper to present to you as the law, and have directed a verdict for plaintiff on the first two issues, leaving to you the consideration of the third issue; that is, whether or not the company substantially complied with its obligations in relation to supplying and furnishing and keeping on hand the water it has contracted to furnish to those 142 hydrants. You remember the testimony on that issue, and you will find what your judgment may be on that issue of fact. If you find compliance, substantially, you will find for the plaintiff. It you find no compliance, substantially, you will find to the contrary. Measuring the testimony-- weighing the testimony-- on that issue, you will keep in mind all the time that a substantial compliance on the part of the plaintiff is sufficient to entitle to recover. If you find for the plaintiff, you will find this: $100 on 100 hydrants for each of these years, with interest thereon. You will find next for 42 hydrants at $50 for each of these years, with interest thereon. Now, that calculation you can make by keeping this suggestion of the court in mind. ' Thereupon the city, having at the proper time reserved exceptions, sued out a writ of error; and the receiver, having also excepted in proper time, sued out a cross writ of error.

V. L. Brooks, D. W. Doom, and S. R. Fisher, for city of Austin.

T. M. Gregory, John D. Rouse, and Wm. Grant, for E. C. Bartholomew and Joseph Nalle.

Before SHELBY, Circuit Judge, and NEWMAN and TOULMIN, District Judges.

NEWMAN District Judge, after stating the facts as above, .

The first and most important question for consideration in this case is that raised by the contention that the city, by the construction of waterworks of its own in 1895, violated the contract which it entered into with the City Water Company in 1882, to the wrong and damage of its successor, the Austin Water, Light & Power Company. The claim is that it was necessarily implied in the terms and provisions of the contract referred to that the city would not itself erect a system of waterworks, and thereby, to a large extent, destroy the value of the property of the City Water Company. Reliance is placed largely, perhaps...