VAN BUREN
PERRY, Circuit Judge.
This action
is brought by the plaintiff as a citizen, resident and
taxpayer of the City of Sioux Falls against the
City of Sioux Falls and its governing board of commissioners
and against John Morrell & Company, a corporation owning
and operating a packing plant in said city. The purpose of
the action is to have declared invalid a certain contract
entered into in 1926 and amended in 1940 between the
governing board of the city and John Morrell & Company
relating to the disposition of the industrial sewage from
said packing plant through the sewage system and disposal
plant owned by the city, and to procure an injunction
restraining the further use of the city sewage system and
plant for the disposal of the company's industrial
sewage. The trial court denied injunction and held the
contract valid, from which the plaintiff appeals.
The findings
of fact and conclusions of law by the trial court were as
follows:
"1. That
the plaintiff at the times mentioned in the Complaint was and
now is a citizen and taxpayer and resident of the City of
Sioux Falls, wherein he has been engaged in the practice of
his profession of medicine and surgery.
"2. That
the defendant City of Sioux Falls at the times mentioned
herein was and now is a municipal corporation of the first
class of the State of South Dakota governed by a Board of
Commissioners consisting of a Mayor and two Commissioners,
and that the defendant John T. McKee is the Mayor and the
defendants Bert T. Yeager and Joseph S. Nelson are
Commissioners of the City of Sioux Falls and were such
officers at all times mentioned in the Complaint.
"3. That
the defendant John Morrell & Company at all times
mentioned in the Complaint was and is a corporation duly
organized and existing according to law with its place of
business located in the City of Sioux Falls and was and is a
taxpayer of the City of Sioux Falls.
"4. That
the defendant John Morrell & Company in the year 1911
built within the City of Sioux Falls a meat packing plant and
since such time has operated said packing plant within the
City of Sioux Falls.
"5. That
prior to the year 1927 the sewage originating within the City
of Sioux Falls including both domestic and
industrial sewage was discharged into the Big Sioux River;
that in the year 1927 the City of Sioux Falls completed the
construction of and placed in operation a sewage disposal
plant for the treatment and disposal of all domestic and
industrial sewage originating within the City of Sioux Falls;
that since such sewage disposal plant was put in operation,
all sewage entering the Sioux Falls disposal plant from the
plant of John Morrell & Company has originated within the
limits of the City of Sioux Falls.
"6. That
such sewage disposal plant was designed and constructed for
the purpose of receiving the industrial sewage from the
packing plant of John Morrell & Company, together with
other industrial sewage originating within the City of Sioux
Falls, and that on the 13th day of September, 1926 the City
of Sioux Falls and John Morrell & Company duly and
regularly entered into a written contract relating to certain
pre-treatment to be given the sewage from the John Morrell
& Company plant and sewage pumping costs to be paid by
said John Morrell & Company, which written contract was
received in evidence as Exhibit 59, a true copy of which is
attached hereto and made a part of this Finding.
"7. That
the City of Sioux Falls and John Morrell & Company
operated under and carried out the terms of said contract,
Exhibit 59, until March 1, 1940, when such contract of
September 13, 1926, was amended by an agreement between said
parties, duly and regularly entered into on March 1, 1940,
which was received in evidence as Exhibit 58, a true copy of
which is attached hereto and made a part of this Finding.
"8. That
John Morrell & Company and the City of Sioux Falls have
fully performed and carried out the terms of said contract,
Exhibit 58, and that pursuant thereto John Morrell &
Company has paid for additions and improvements to the sewage
disposal plant of the City of Sioux Falls in the sum of
approximately $70,549.65.
"From
the foregoing Findings of Fact the Court makes the following
Conclusions of Law;
"1. That
the defendants are entitled to Judgment dismissing the Complaint of the plaintiff on its merits and to
judgment for costs."
Except as to
the legal effect of the contracts, the evidence supports the
findings of the court.
The contracts
between the city and the company referred to in the findings
were as follows:
Exhibit 59
was a contract dated September 13, 1926, between the City of
Sioux Falls (hereinafter referred to as the city), John
Morrell & Company (hereinafter referred to as the
company) and the Kittery Realty Co. It recited that the city
desired to build a sewage pumping station and mains upon and
over certain land belonging to the Realty Co.; that the
Realty Co. owned the packing house and other lands leased by
Morrell & Company; that Morrell & Company desired to
have the sewage from the packing plant disposed of through
the city main and pumping station, and it was agreed that the
city should construct certain mains from the end of the trunk
sewer of the city to the pumping plant; that upon completion
of such mains, pumping station and disposal plant the company
might connect with said main; that the company should install
certain suitable equipment for the fine screening,
sedimentation and grease skimming of all the company sewage
before it entered the mains; that the company should pay to
the city its pro rata share of the cost of pumping its sewage
and a part of certain fixed and operating charges.
The contract
had no time limit. Either party could cancel it at will. The
parties operated under it until March 1, 1940 when a contract
was entered into as hereinafter set forth.
In the
meantime, the record shows, in November 1939 the sewage
disposal plant had ceased to function and from then until
August 1940, while repairs were being made, the raw or
untreated sewage, of the city, including that of Morrell
& Company was poured into the Big Sioux River. The city
and the company had jointly engaged the firm of sanitary
engineers who originally planned the disposal plant and again
hired them to survey the situation and make recommendations
and plans for the repair and improvement of the
plant. This firm had reported that the filter beds were
clogged, due to the presence of too much fine stone in the
filter bed and the presence of grease in the sewage which had
coated and clogged the filter beds, which grease was due to
the industrial wastes. Other serious problems had also
developed. Both the city and the company had expanded. A
large program of corrective measures and improvements was
laid out. The city and company were at the time threatened
with suits for the pollution of the river. See Ericksen v.
Morrell & Co. et al., S.D., 14 N.W.2d 88.
Exhibit 58,
referred to in the findings of the trial court as a contract
"duly and regularly entered into" is a contract
between the city and the company "amending" the
former contract. It is dated March 1, 1940 and reads:
"Whereas
the City of Sioux Falls, in its municipal capacity, has
constructed a sewer system and sewage disposal plant, which
said sewage disposal plant is in need of improvements and
betterments, and
"Whereas,
the sewage originating in the John Morrell & Company
packing plant in the City of Sioux Falls has been for many
years last past handled through the sewage disposal system of
the City of Sioux Falls by virtue of the legal rights of the
parties, and an agreement entered into between the City of
Sioux Falls and John Morrell & Company, on September
13th, 1926, and
"Whereas,
the parties hereto are desirous of amending said agreement of
September 13th, 1926, to read as follows:
"Now
Therefore, It Is Hereby Agreed that the sewage originating in
the John Morrell & Company plant shall hereafter pass
from the said John Morrell & Company into the sewage
system of the City of Sioux Falls, through connections now
established, and that whereas John Morrell & Company has
installed, at its own plant, suitable dual equipment of the
continuous type fine-screening, John Morrell & Company
agrees that all of the sewer water that is to be delivered to
the city sewer system from John Morrell & Company, shall
be fine screened through said fine-screening equipment at the
expense of John Morrell & Company.
"It Is
Agreed, in consideration of the payments and
expenditures to be made by John Morrell & Company, as
hereinafter specified, that the said John Morrell &
Company may send into the sewer system
of the City of Sioux Falls, and into the disposal plant of
the City of Sioux Falls, all of the sewage of John Morrell
& Company for a period of fifteen (15) years from and
after March first, 1940.
"John
Morrell & Company agrees to pay seventy-five per cent
(75%) of the total cost of rehabilitation of filters in the
Sioux Falls Disposal Plant, which said rehabilitation is now
in progress under contract between the City of Sioux Falls
and Abraham Ogdie, which said 75% of the total cost is
estimated to be Eleven thousand two hundred fifty Dollars,
($11,250.00).
"Further
John...
