City of Ft. Madison v. Ft. Madison Water Co.

• Decision Date: 03 March 1902
• Docket Number: 1,570.
• Citation: 114 F. 292
• Parties: CITY OF FT. MADISON v. FT. MADISON WATER CO.
• Court: U.S. Court of Appeals — Eighth Circuit

114 F. 292

CITY OF FT. MADISON v. FT. MADISON WATER CO.

No. 1,570.

United States Court of Appeals, Eighth Circuit.

March 3, 1902

E. C Weber, for plaintiff in error.

James C. Davis, for defendant in error.

Before Caldwell, SANBORN, and THAYER, Circuit Judges.

CALDWELL Circuit Judge.

The Ft Madison Water Company brought this action against the city of Ft. Madison to recover $4,440 alleged to be due for rent of hydrants. The contract for the hydrants was made by ordinance of the city, and contained this provision: 'Said hydrant rental to be paid quarterly out of the special tax fund, to be levied and collected as other taxes of the city are for this purpose. ' The statute relating to the powers of cities to contract for a supply of water in force at the time the contract was entered into read as follows:

' * * * and such cities or towns are authorized and empowered to enter into a contract with the individual or company constructing said works, to supply said city or town with water for fire purposes, and for such other purposes as may be necessary for the health and safety thereof, and to pay therefor such sum or sums as may be agreed upon between said contracting parties. ' Section 641, McClain's Code. ' * * * if the right to build, maintain and operate such works is granted to private individuals or incorporated companies by such cities or towns, and said cities or towns shall contract with said individuals or companies for a supply of water for any purpose, such city or town shall levy each year, and cause to be collected, a special tax as provided for above sufficient to pay off such water rents so agreed to be paid to said individual or company constructing said works, provided, however, that said tax shall not exceed the sum of five mills on the dollar for any one year. ' Id. Sec. 643.

The defense to the action set up in the city's answer is that the city has levied, collected, and paid a special tax of five mills on the dollar on the taxable property of the city to pay the hydrant rentals due under the contract, but that since September, 1896, that levy has not furnished sufficient revenue for that purpose, and that the city has no power or authority to pay the deficit out of any other fund, and 'therefore,' says the answer, 'said city is not indebted to the plaintiff in said sums or any other sum ' The only question in the case is this: Is the city under obligation to pay that portion of the contract price for the hydrant rentals that is in excess of the revenue the five-mill levy will produce, and will an action lie against it therefor? Under the statutes quoted there is no limitation on the amount of indebtedness a city may contract to procure water for its corporate...