City of Galesburg v. Galesburg Water Co.

• Decision Date: 20 March 1888
• Parties: CITY OF GALESBURG v. GALESBURG WATER CO. et al.
• Court: U.S. District Court — Northern District of Illinois

34 F. 675

CITY OF GALESBURG v. GALESBURG WATER CO. et al.

United States Circuit Court, N.D. Illinois.

March 20, 1888

Fletcher Carney and F. A. Willoughby, for complainant.

Turner McClure & Rolston and Arthur Ryerson, for defendant.

GRESHAM J., (orally.)

By an ordinance passed on the 12th of May, 1883, the city of Galesburg granted to Nathan Shelton the right to construct and maintain, within and near the city, water-works to supply both public and private wants, for a term of 30 years; the yearly rental for fire hydrants being specified in the ordinance. This ordinance was accepted by Shelton. At and previous to this time, the city had maintained an imperfect system of water-works, and the old mains were sold to Shelton at a price to be ascertained in the future, and paid for in water-rents. Shelton caused the Galesburg Water-Works Company to be organized, and assigned to it his contract with the city. In August, 1883, the Water Company, by its trust deed conveyed to the Farmers' Loan & Trust Company of New York its property acquired and to be acquired to secure the payment of an issue of bonds amounting to $121,000. The Water Company proceeded to erect the works and lay down additional mains, and on December 6, 1883, the city was notified that the works had been completed, and that the Water Company was ready for the test called for by the ordinance; and on the same day, the members of the common council being present such test was satisfactorily made, as appears from an ordinance of the common council. A few months later complaints were made both as to the character and quantity of the water. In the summer or fall of 1884 the Water Company admitted its failure to supply water according to the terms of the contract, and further time was given it to sink gang-wells, which it was thought would secure an abundant supply. After sinking such wells, the Water Company claimed that it was able to fulfill the contract; but it failed and refused on request to demonstrate its ability to do so by a proper test of its works; and the proof shows that this claim was unfounded. On the 1st of June, 1885, the city, by an ordinance, rescinded the contract with Shelton, and by its officers repossessed itself of its old water-mains for use and protection from fire, and brought this suit in the state court at Galesburg to set aside the contract for fraud and non-compliance on the part of the Water Company. The ordinance granting the franchise to Shelton required him to furnish pure water of a maximum quantity, and provided that the city should not be liable for hydrant rents for such time as the works did not supply the required amount of water. The city paid no...