Gamewell Fire-Alarm Telegraph Co. v. City of Laporte

• Decision Date: 05 June 1900
• Docket Number: 649.
• Citation: 102 F. 417
• Parties: GAMEWELL FIRE-ALARM TEL. CO. v. CITY OF LAPORTE.
• Court: U.S. Court of Appeals — Seventh Circuit

102 F. 417

GAMEWELL FIRE-ALARM TEL. CO. v. CITY OF LAPORTE.

No. 649.

United States Court of Appeals, Seventh Circuit.

June 5, 1900

The appeal is from a decree, entered on demurrer, which dismissed the bill of complaint, as amended, for want of equity. 96 F 664. The bill alleges substantially the following facts as the grounds for equitable relief: The complainant is a New York corporation, and engaged in the business of making and installing 'fire-alarm and police telegraph systems,' and on July 16, 1890, made proposal, in writing, to furnish to the city of Laporte, for the sum of $3,500, its 'system of automatic fire-alarm telegraph,' according to specifications stated in the proposal, to be completed and ready for operation within four months. The apparatus, material, and work to be supplied by the complainant included a 'tower bell striker,' but not the bell, and all the new poles 'necessary to complete the line circuit. ' Payment of the contract price was to be made by the city on May 1, 1891, and on receipt thereof the proposal states that 'unrestricted license to use and perpetuate the apparatus' is thereby conveyed to the city. It further provides that the city shall furnish a suitable room for the station, and 'shall secure the right of way through the public highways for the wire circuit, give the use of all poles now standing that may be owned or controlled by said city, and the use of such bell as may be selected for giving alarms. ' This proposal was accepted on behalf of the city after an opinion was given, in writing, by the city attorney to the effect, among other matters, that objections 'that the city cannot incur a debt, as they now owe more than the constitutional limit,' are not sufficient to defeat the wish of the common council, because there existed in the general fund an unappropriated balance which could be employed for the payment contemplated by the contract, and, if no funds were applicable, warrants could be drawn, payable when the tax of the current year was collected. 'Relying upon said contract, and said opinion as to its legality,' the complainant furnished and installed the system accordingly which was accepted by the city on December 19, 1890; and the system thus installed 'is complete and entire, and incapable of dismemberment or disintegration without destroying the use thereof, and without irreparable injury to the several parts composing the same. ' When the time for payment matured, the city refused to pay the contract price and the complainant brought suit in the state court for its recovery, which resulted in a decision by the supreme court of the state (City of Laporte v. Gamewell Fire-Alarm Tel Co., 146 Ind. 466, 45 N.E. 588, 35 L.R.A. 686), that the contract was void by reason of the indebtedness of the complainant accordingly. The system so constructed is 'of great utility and even of prime necessity' to the city, and, being in the possession of the complainant after completion, was turned over to the city in the faith and belief that the contract was obligatory on the city and payment would be made; and after such decision the city was permitted to retain possession pending negotiations for an adjustment, and 'solely for the public use and safety, ' and 'not with intent to waive or part with any interest or right therein. ' The indebtedness of the city has since become reduced to such extent that it may lawfully become obligated 'to buy said plant and system,' and many fair proposals were made to the defendant to that end, but were all rejected; and finally, about February 28, 1898, the complainant became convinced that it was necessary, 'in justice to itself, to acquire possession of and to operate said plant, through and by its own officers, agents, and employes,' and thereupon, 'with such objects in view, * * * demanded possession of said plant from said city. ' The city refused compliance, and has since wrongfully withheld the plant from complainant, and continued the use thereof; and, although such use is reasonably worth $600 per annum, the city has refused to pay reasonable compensation therefor, after deducting its proper expense and outlay. The complainant 'tenders and holds itself ready and willing to perform and discharge all public duties' incident to said system, and avers that it is without adequate remedy at...