Huron Waterworks Co. v. City of Huron

• Citation: 62 N.W. 975,7 S.D. 9
• Parties: HURON WATERWORKS CO. v. CITY OF HURON. MYERS et al. v. CITY OF HURON et al.
• Decision Date: 20 April 1895
• Court: Supreme Court of South Dakota

62 N.W. 975

7 S.D. 9

HURON WATERWORKS CO. v. CITY OF HURON.

MYERS et al. v. CITY OF HURON et al.

Supreme Court of South Dakota

April 20, 1895

Syllabus by the Court.

1. The waterworks of a city, constructed under a power conferred upon the city by its charter "to construct and maintain waterworks" for protection against fires and for furnishing the inhabitants thereof with a supply of pure water for domestic purposes, and constructed and maintained at the expense of the inhabitants of such city, are held as the property of the municipal corporation, for public use and charged with a public trust, of which the inhabitants of such city are the beneficiaries.

2. The power to construct a waterworks system for a city is not a necessary incident of its incorporation, but must, like all its other powers, be derived directly from the legislature of the state; and the power "to construct and maintain" such a system implies a duty of the municipality, through its corporate authorities, to maintain and preserve possession for the benefit of the public.

3. When a municipality is vested by its charter with power to construct and maintain a system of waterworks at the public expense and for the public use, and accepts such charter, and proceeds to exercise this authority in the manner designated by the construction and maintenance of such waterworks at the expense of the citizens of the municipality, the waterworks so constructed and maintained are clothed with a public trust and are devoted to a public use.

4. The waterworks of a city, constructed and maintained by the municipality at the expense of its citizens and for the public use, being held by such municipality charged with a public trust, such trust, and the duty of the municipality under it, cannot be discharged and devolved upon another, by a sale by the city's common council, without legislative authority, of such waterworks, and the right and duty of the city to maintain and use them in execution of such public trust.

5. Power was conferred upon the city of Huron, by its charter "to construct and maintain waterworks." Said city accepted the charter, and proceeded to erect, at the expense of about $46,000 to the citizens of said city, waterworks for preventing fires and furnishing the inhabitants of said city with a supply of pure water. These works were kept and maintained for several years, when the city council of said city, without legislative authority, assumed to sell and dispose of the entire plant and franchise. Held, that the waterworks of said city were held for public use and charged with a public trust, and that such attempted sale was void.

6. Upon such attempted sale by the city council, the purchasers paid into the city treasury the sum of $45,000 as the purchase price of said waterworks, but it was not found that said purchase money was appropriated by the common council to any lawful purpose of the corporation, or was in any manner used by the corporation. Held, that the payment of the consideration into the city treasury was unauthorized, and that its receipt by the city treasurer did not estop the city from recovering possession of its waterworks system without repayment of the sum so paid into the city treasury.

Appeal from circuit court, Beadle county; A. W. Campbell, Judge.

Two actions, one by the Huron Waterworks Company against the city of Huron, and one by H. Ray Myers and Henry Schaller, on behalf of themselves and all other taxpayers similarly situated, against the city of Huron and the Huron Waterworks Company. The actions were consolidated, and from the judgment rendered the city of Huron, H. Ray Myers, and Henry Schaller appeal. Reversed.

A. W Wilmarth and H. Ray Myers, for appellants. John L. Pyle, for respondents.

CORSON P. J.

These two actions were consolidated and tried together in the court below, as they involved substantially the same question. Judgments were rendered in both actions in favor of the Huron Waterworks Company, and from the judgments the city of Huron and H. Ray Myers and Henry Schaller have appealed to this court.

A few paragraphs from the complaint of H. Ray Myers and Henry Schaller and three findings of fact by the court will sufficiently present the case for the purposes of this decision.

It is alleged in the complaint: "(3) That heretofore, and during the years 1883 and 1884, under and by virtue of the power conferred by said charter of the city of Huron, the city of Huron did construct, and cause to be constructed, a system of waterworks, consisting of engine, boiler, pumps, water mains, pipes, hydrants, sewers, and all other appurtenances necessary to a complete system of waterworks, at a great expense, to wit, as informed and believed by the plaintiffs, to be the sum of forty thousand dollars; and to pay for said waterworks and sewer, said city council issued the bonds of the city of Huron, for said forty thousand dollars. payable fifteen years after date, bearing interest at the rate of seven per cent. per annum, having first been directed to issue said bonds by vote of the people, at an election duly called and held for that purpose, as provided by said charter. (4) That heretofore, and during the year 1886, the said city of Huron caused to be bored and constructed a large six-inch artesian well, as a part of an addition to the aforesaid system of waterworks, and, as informed and believed, at an expense of four thousand five hundred dollars." "(6) That said city of Huron, from the year 1883 to July 21, 1890, through its city council, operated, controlled, and maintained said waterworks, and made all needful rules and regulations concerning the distribution and use of water supplied by said waterworks for the prevention and extinguishment of fires, and to supply the citizens and taxpayers at a moderate and reasonable rate, in accordance with the provisions of section 7, subd. 9, of the charter of said city." "(8) That, at the time of the commission of the grievances hereinafter mentioned, said waterworks were owned by, and were of great value to, said city and taxpayers of said city of Huron, amounting, as informed and believed by the plaintiffs, to at least one hundred thousand dollars." (12) That "the mayor and city council of said city of Huron, on or about the 21st day of July, 1890, did unlawfully and wrongfully, and in violation of the city charter and their high and legal duties and trust reposed in them by the taxpayers and corporators of the city of Huron, execute and deliver to the defendant, the Huron Waterworks Company, a deed in terms conveying to said defendant, the Huron Waterworks Company, the entire valuable waterworks system of and belonging to the city of Huron, including all machinery, buildings, grounds, engines, boilers, water mains, hydrants, artesian well, pumps, and all property and effects of every description appertaining to said waterworks system, and placed the said defendants the Huron Waterworks Company in full possession and control of the same, without the consent and to the great injury of the taxpayers and corporators of the city of Huron." The plaintiffs conclude with a prayer that the sale and conveyance might be declared null and void; that the officers of said city be enjoined from paying over to the Huron Waterworks Company the rents for the use of water for the city purposes contracted to be paid by the common council of the city; and that the possession of said waterworks property be restored to the city.

The court, among others, found the following facts: "Fourth. That the city of Huron made said conveyance in pursuance of an agreement to make the same, entered into on the 16th day of July, 1890, at which time ten thousand dollars was paid into the city treasury by the Dakota Farm Mortgage Company, for the use of said Huron Waterworks Company, and on the 21st day of July, 1890, the balance of thirty-five thousand dollars of the purchase price was paid into the city treasury by the Dakota Farm Mortgage Company for the use of said Huron Waterworks Company, and on that day the city executed said deed of conveyance, and delivered the same to said Huron Waterworks Company, and placed said company in possession of said waterworks." "Seventh. That said waterworks plant was constructed and used by said city of Huron for the convenience of the citizens of the compact community embraced within the corporate limits of said city, for furnishing water to private consumers, for domestic and power purposes, and for the protection of said city and its inhabitants from the ravages of fire, and the same has at all times been used for those purposes, both by the city before the sale, and by said waterworks company since said sale." "Tenth. I find that neither the city, nor the taxpayers of the same, have ever paid or tendered back to said waterworks company any part of the purchase price of the said waterworks, or any part of the sum paid out for the repairs or extensions of said waterworks system, and no effort has been made on the part of the city or taxpayers to place the waterworks company in the same condition as they were before the sale and delivery of the said property."

The material facts in the action of Huron Waterworks Co. v. City of Huron are stated in the opinion delivered in that case on a former appeal, reported in 54 N.W. 652, 3 S.D. 610, and, it is sufficient to say, its object was to obtain an injunction against the officers of the city, restraining them from interfering with the waterworks property.

It will not be necessary to notice the numerous assignments of error as we shall confine ourselves to the discussion of only two questions raised by the record, which are: First. Did the common council of the city of Huron possess the power,...