City of Leadville v. Leadville Sewer Co.

• Decision Date: 06 December 1909
• Citation: 47 Colo. 118,107 P. 801
• Parties: CITY OF LEADVILLE et al. v. LEADVILLE SEWER CO.
• Court: Colorado Supreme Court

107 P. 801

47 Colo. 118

CITY OF LEADVILLE et al. v. LEADVILLE SEWER CO.

Supreme Court of Colorado, En Banc.

December 6, 1909

Appeal from District Court, Lake County; George W. Allen, Judge.

Action by the Leadville Sewer Company against the City of Leadville and others. From a judgment for plaintiff, defendants appeal. Reversed in part, and modified and extended.

John A. Rush and H. R. Pendery, for appellants.

John A Ewing, for appellee.

HILL J.

It appears that there were no sewers in the city of Leadville prior to the year 1886, at which time the appellee was incorporated under the laws of Colorado with a capital stock of $10,000. Its objects as set forth in its articles of incorporation were 'to construct, own, operate and maintain sewers and drains for sewer purposes in and about the city of Leadville. * * *' Its corporate existence was fixed at 20 years.

August 5, 1886, appellee applied to the city council of Leadville for permission to run and operate sewers through certain streets and alleys of the city. Pursuant to said application the city council, by motion, granted or attempted to grant the permission prayed for, and thereafter, relying upon this permission, appellee constructed a sewer system in some of the streets and alleys of the city, and sundry properties were connected with it upon the payment of certain rates fixed by the appellee. It appears that at that time the stockholders, or most of them, were property owners and the same rate was charged them as others. At four different times thereafter (the last being in 1891) the appellee applied to and received from the city council permission to, and did, construct and extend sewers upon other streets and alleys, and ultimately the system covered a number of streets and alleys, principally in the business section, and numerous citizens connected their properties and paid the rates prescribed by the sewer company. No ordinance was passed granting or attempting to grant to the appellee any franchise, and the only right it had (if any) for its use of the streets and alleys was secured through the permits, which were indefinite as to time. The only evidence on the subject is the records of the city, which as to the first permit states: 'A petition of the Leadville Sewer Company asking permission to run and operate a sewer was read. * * * On motion * * * the petition was granted on condition that the work be prosecuted under the direction of the committee on streets. * * * Motion carried.' The permits for extensions were similar. The only ordinances enacted concerning the subject were those regulating the method by which the streets and alleys might be excavated for the laying or repairing of water, sewer, and other pipes. Up to the time of this trial no other sewer system of any consequence was provided, and a large portion of the city was without sewers.

When the corporate existence of the appellee expired in 1906, renewal certificates were made by its officers for another 20 years, and it continued to operate and maintain its system, without objection by the city, until February 11, 1908, when the city council, at a regular meeting, passed the following resolution: 'Resolved, by the city council of the city of Leadville, that all permits or licenses of every kind and character heretofore granted to the Leadville Sewer Company be and the same are hereby revoked, set aside and annulled, and, further, that the said the Leadville Sewer Company shall not be permitted to make any excavation of any kind in any of the streets, alleys or public places of the city of Leadville for any purpose, nor shall said company be permitted to charge any inhabitants of said city for any sewer connection or service as this city does not recognize in any manner any rights of any kind in the said the Leadville Sewer Company in or to any sewer in said city, or in or to any charges for the use of the same, but hereby expressly repudiates the same.' Thereafter, and until the bringing of this action, the appellee ceased to excavate in the streets and alleys for the purpose of disconnecting consumers, although some of its patrons refused to make further payment for the use of the sewers.

In March, 1908, a quo warranto suit was instituted in the district court of Lake county by the district attorney to test the rights of the appellee to continue its operation in the streets and alleys of the city, and to determine the property right to the sewer pipes. The claim was that the appellee was exercising these rights without due warrant or authority of law, it having no such rights and never having had. The sewer pipes, being a part of the realty, were not the property of the appellee; but belonged to the city for the use and benefit of its inhabitants. The quo warranto suit is still pending and undetermined. Matters thus dragged along until on or about May 28, 1908, when the main sewer on Harrison avenue (the principal street of the city) became clogged, and it was contended by the city that its condition thus became a menace to the health of its inhabitants. The appellee took no steps to remove the same until June 1st, when it commenced to excavate in the street for that purpose, but was prevented from finishing by the officers of the city, who, at the expense of the city, employed men to excavate and remove the clog and repair the sewers, which was done without injury or expense to the appellee, and the work was finished prior to the issuance of the temporary restraining order in this action. The city disclaimed any intention of doing anything to injure or damage the sewers, but proposed to continue the enforcement of its resolution in prohibiting the appellee from excavating in the streets of the city.

In making the repairs, it appears the city requested the agents of the appellee to furnish the materials, which they refused to do. Also, the city, through its officials, offered and agreed with the appellee to enter into an agreement in substance that in case of any stoppage, breakage, or leakage in the pipes thereafter they should be repaired under the direction of the mayor, the men who were then employed by the appellee to have the preference, if they desired, in performing such services, and in case the sewers should be adjudged to be the property of the city, it to pay the entire expense of such labor; neither party to waive any rights in the quo warranto action on account of such agreement, the object evidently being to prevent anything from happening which would endanger the public health. But the appellee declined and instituted this suit against the city, Mr. Rose (its mayor) and other officials, to restrain it and them from interfering or hindering it in its work of excavating in the streets and alleys for the purpose of removing any stoppage in its sewer pipes, or for the purpose of cutting off and disconnecting private consumers who refused or neglected to pay, or from interfering in any manner in its operation of the sewers or sewer pipes, etc.

In its answer the city denied the appellee's right to continue the operation of its plant; claimed it was a trespasser in the streets; pleaded the pendency of the quo warranto suit to test its right to continue and the prayer therein that the sewers be decreed to be the property of the city, which action was undetermined; claimed that the appellee and its agents were attempting to defeat a trial of that cause; declared their intention, in order to protect the public health, to continue, unless enjoined, to prevent the appellee from excavating in the streets and alleys; claimed that appellee had notice of the resolution of February 11th, and that it complied therewith until June 1, 1908, and substantially set forth the facts as hereinbefore stated. Decree was rendered in favor of the plaintiff with a perpetual injunction as prayed, with a proviso that it should not be taken to interfere with the adjudication of any rights as between any or either of the parties in the quo warranto suit then pending; from which judgment the city and its officials have appealed to this court.

It is contended by the appellants that the appellee had no right to continue, or any lawful authority to perform any of the acts which it had performed in the past, and, in any event, such an extreme and exceptional case is not presented as calls for the interference of a court of equity. The contend that the case of Weaver et al. v. Canon Sewer Co., 18 Colo.App. 242, 70 P. 953, is controlling, wherein it is held that subdivision 10 of section 4403, Mills' Ann. St., having empowered municipal corporations to construct sewers and to regulate their use, and having provided a method by which the cost of their construction may be defrayed, this mode must be followed; ownership and control, except in the municipality, would be inconsistent with its terms and an ordinance attempting to do otherwise was void. They further contend that as the appellee had no lawful right at any time to place any of its pipes in the streets and alleys of the city or operate sewers therein, as under our statutes no such right could be conferred upon it, it was at all times a trespasser, and upon account thereof the sewer pipes became a part of the realty and are the property of the city for the use and benefit of its inhabitants.

It is contended by the appellee, first, that under the seventh subdivision of the seventh paragraph of section 4403 Mills' Ann. St., the power exists in the city council to grant the permits under which it operates; that the Weaver Case, supra, being a construction of the tenth subdivision only, did not undertake to construe the other subdivisions; that if it did there would only be a defective power in the city to make the grant; that in such case...