City of Brenham v. Brenham Water Co.

• Decision Date: 25 March 1887
• Citation: 4 S.W. 143
• Parties: CITY OF BRENHAM v. BRENHAM WATER CO.
• Court: Texas Supreme Court

Page 143

4 S.W. 143

CITY OF BRENHAM v. BRENHAM WATER CO.

Supreme Court of Texas.

March 25, 1887.

Appeal from district court, Washington county.

Tarver & Bryan and J. T. Swearingen, for appellant. Garrett, Searcy & Bryan and Bassett, Muse & Muse, for appellee.

STAYTON, J.

On August 18, 1884, the city of Brenham passed an ordinance, which provided that an association of persons, then unincorporated, known as "Brenham Water Company," should have the right to establish construct, and operate a system of water-works in or adjacent to the city, and for this purpose to use all the streets, alleys, lanes, public grounds, and all places under the control of the city, so far as might be necessary for the proper conduct of the business, "and for supplying said city, and the inhabitants thereof, with fresh water for domestic, manufacturing, fire, and other purposes." The length of mains and pipes to be first established was fixed at not less than four miles, to be located as might be agreed between the company and the city, which were required to be extended as the city might order to be done. The seventh section of the ordinance determined the capacity the waterworks were required to have, and the eighth section gave the city the right to use water for public purposes other than the extinguishment of fires, which the city was to receive in full payment for all municipal taxes during the full term for which the contract was to run. The ninth section reserved to the city the right to purchase the water-works after the expiration of 10 years, at such price as might be agreed upon by persons to be selected as therein provided, whose appraisement was to be binding upon both parties. Section 1 was: "That there is hereby given and granted to Brenham Water Company the right and privilege, for the term of twenty-five years from the date of the adoption of this ordinance, of supplying the city of Brenham, and the inhabitants thereof, with water for domestic or other uses, and for the extinguishment of fires." The fifth section is as follows: "The said city of Brenham hereby agrees to rent, and does rent, of the said Brenham Water Company, 35 double-nozzle fire hydrants, located, by authority of said city, upon the mains and pipes within said city, for the extinguishment of fires, at a rental of $3,000 per annum, payable quarterly on the first day of January, April, July, and October in each year. The said rental shall commence when the city is notified that the said hydrants are ready for use, and shall continue during the full term specified in this ordinance; and for the purpose of providing for the payment of all hydrant rental becoming due, under the provisions of this contract, the city council shall levy, collect, and appropriate annually a sufficient sum of money to cover the amount becoming due on this contract." The sixth section provided that "the said Brenham Water Company shall make all extensions of mains and pipes whenever the said city council shall order the same to be made, and shall erect not less than at the rate of ten double-nozzle fire hydrants to the mile on such extensions, for which hydrants the said city of Brenham shall pay a rental of $60 each per annum, payable as provided in section 5." The thirteenth section fixed the water rate which might be charged to inhabitants in most of the matters and business that could be enumerated, but as to some enumerated, and those not enumerated, the charge was left to be fixed by contract to be made with the superintendent, and all rates were made payable quarterly in advance at the office of the corporation. The fourteenth section provides that "this ordinance shall be a contract by and between the city of Brenham and the Brenham Water Company, their successors and assigns, and shall be binding on both parties thereto, provided said company shall file with the city clerk its acceptance of the same in writing within five days after the passage of the same." The water company's acceptance was filed as required by the ordinance.

Before the first of June, 1885, the persons composing the Brenham Water Company incorporated under the same name, under the general incorporation act, and on that day the city was notified that the works were ready for use; but it was found that the water supply was not sufficient; wherefore the water company asked the acceptance of the works by the city, agreeing to give an additional supply of water equal to that they were then able to furnish, and to increase it as the consumption demanded it; to keep on hand such fuel as would enable it at all times to speedily put the pumps in motion in case of fire; to keep and maintain a telephone; to pump the stand-pipes full every day, and to bank the fires under the boilers; to allow the fire department to fill the fire cisterns from any of the hydrants; and "to adopt and enforce strict rules and regulations for the faithful carrying out of the purposes for which it is intended, and to use every diligence to give the city of Brenham good and efficient fire service." The city, on the same day, accepted the water-works under the terms of the agreements then tendered; and, in its ordinance so accepting, it provided "that no payment shall be made on said contract if the said company does not comply with its agreement hereinbefore recited, but, on compliance therewith, the payments shall be made, commencing on the first day of June, 1885." The ordinances did not give to the city the power to regulate and control the water-works, and to make them effective in case the water company failed to do so.

This action was brought to recover the price stipulated for the use of hydrants for the time intervening June 1, 1885, and January 1, 1886. The ordinance was made a part of the petition.

The city filed defenses, thus summarized, in the brief of its counsel, correctly:

"(1) A general demurrer.

"(2) That it appeared from the petition that the contract sued upon created a monopoly and perpetuity in plaintiff.

"(3) By special exception that no authority to make said contract was therein alleged.

"(4) That it appeared from said petition that the city council had rented the hydrants for a period of twenty-five years, at the yearly rental of three thousand dollars, and no authority was alleged in the council to bind the city for such a period of time.

"(5) A general denial.

"(6 and 7) That said contract was inoperative, against public policy, and void, because — First, the city of Brenham, having less than ten thousand inhabitants, was prohibited by the constitution and laws of the state from levying for city purposes more than twenty-five cents on the one hundred dollars valuation, on the property subject to taxation, and at the date of said contract the current expenses of the city, including salaries of officers and other reasonable and necessary expenses, annually incurred, exceeded the revenue derived from said tax; that there was no excess in any fund which could be appropriated to the payment of the rent of said hydrant, and the council, having no means to pay said rent, and having exhausted the limit of taxation allowed by law, were not authorized to contract said debt; that at the date of the contract the entire available current revenue of the city, out of which the expenses incurred by said contract could be paid, amounted to the sum of $8,763.31, an itemized statement of which is given, while the current expenses amounted to the sum of $12,942.14, an itemized statement of which is given; that these expenses, exceeding all the available revenues of the city, rendered the contract inoperative, illegal, and void.

"(8 and 9) That the contract was an attempt on the part of the council to surrender their legislative discretion, and barter away the power conferred upon it by law, and was contrary to public policy.

"(10) That the contract, under the pretense of obtaining water for the city, was in truth and in fact a donation.

"(11) That the price stipulated was so extortionate, unreasonable, and oppressive as to render said ordinance void.

"(12) That said contract exempted the property of plaintiff from the payment of city taxes during the term of twenty-five years, and was in violation of law which prohibits the council from appropriating the school tax and other special taxes to any fund other than that for which it was levied, and was therefore illegal.

"(13) The defendant specially denied that plaintiff complied with its undertakings, in consideration of which the promises of the defendant were made particularly in reference to the quantity or supply of water to be obtained, and quality of the pipes and mains furnished by the company.

"(14) That for these reasons, among others, the council, on the tenth day of July, 1885, adopted "an ordinance rescinding the contract with the Brenham Water Company, made August 18, 1884, and the supplemental contract made June 1, 1885, and repealing certain sections of the said ordinance entitled `An ordinance to provide a system of water-works for the city of Brenham,' etc. The sections of said ordinance so repealed were all sections which required the water company to furnish water to the city for any purpose, or authorized the payment of plaintiff therefor in the amount claimed in the suit; that the sections in the ordinance excepted in said repealing ordinance were the sections which gave the plaintiff the right and privilege of supplying water, and the provisions therein for the enjoyment and protection thereof; that this ordinance of July 10th is a bar to plaintiff's action.

"(15) That, at the date of the contract, there was no such corporate body in existence as the Brenham Water Company; that the pretended existence of such a contract at the date of said contract was false and fraudulent.

"(16) That the said company, through its agents, falsely represented to and assured the council, as an inducement to the contract, that the system of...