Ironwood Waterworks Co. v. Trebilcock

• Decision Date: 27 March 1894
• Citation: 58 N.W. 371,99 Mich. 454
• Court: Michigan Supreme Court
• Parties: IRONWOOD WATERWORKS CO. et al. v. TREBILCOCK, Mayor, et al. GEAREY et al. v. SAME.

58 N.W. 371

99 Mich. 454

IRONWOOD WATERWORKS CO. et al. v. TREBILCOCK, Mayor, et al.

GEAREY et al. v. SAME.

Supreme Court of Michigan

March 27, 1894

Certiorari to circuit court, Gogebic county; Norman W. Haire, Judge.

Mandamus on relation of the Ironwood Waterworks Company and another to William Trebilcock, mayor, and others, and by C. M. Gearey and others against same defendants. Writs granted. Respondents bring certiorari. Reversed.

Charles E. Miller, for petitioners in certiorari. Thomas Kissane and Charles M. Humphrey (Lewis L. Delafield and F. A. Baker, of counsel), for respondents.

GRANT J.

The city of Ironwood, Mich., and the unincorporated village of Hurley, in the state of Wisconsin, are situated on the opposite sides of the Montreal river, the boundary line between Michigan and Wisconsin. The Ironwood Waterworks Company is a private corporation, duly organized October 10 1890, under chapter 84, How. St., for the purpose of constructing, maintaining, and operating waterworks in the city of Ironwood, and supplying the city and its inhabitants with water for public and private use. The Hurley Water Company is a like corporation, duly organized July 6, 1890, under chapters 85, 86, Rev. St. Wis. The proper ordinances were passed by their respective municipal corporations, conferring the requisite franchises for a period of 30 years. The two corporations are under the same management, and controlled by the same parties. They constructed a system of waterworks to supply the two places with water under their respective franchises. Water mains were laid in the city of Ironwood by the Ironwood Waterworks Company, and in Hurley by the Hurley Water Company. The two cities were connected by water mains laid across the Montreal river, under two of the main streets which run through the two places. Each company erected a standpipe or reservoir within the territory of its respective municipality. Both standpipes are of the same size, on the same level, and contribute in maintaining the pressure of water and supplying water to both places. Both companies are supplied with water from a pumping station in the city of Ironwood. The capital stock of each company is $100,000, all duly issued. November 1, 1890, the Hurley Water Company issued a series of bonds to the amount of $250,000, of which $226,000 are outstanding and the remainder is held by the trustees of the bondholders to be delivered and used in making future extensions of water mains. These bonds are secured by mortgage upon all the property, revenues, and franchises of both companies. The charter of the city of Ironwood contains the following provisions: "The common council may purchase of the Ironwood Waterworks Company and the Hurley Water Company, a corporation, all the waterpipe owned by said companies, and now laid in the streets and alleys and other public places of said city; also purchase the stock, rights, privileges, and franchises of said Ironwood Waterworks Company and said Hurley Water Company; and the common council may provide for the payment of such pipes, stock, privileges, and franchises by bonding said city, except as hereinafter provided." "The total indebtedness of the city for borrowed money shall not exceed five per cent. of the assessed valuation of the real and personal property of said city for the year 1892; and, in case the common council does not purchase said Ironwood Waterworks Company and Hurley Water Company, the bonding of the city shall not exceed three per cent. of equalized valuation of 1892." Under the resolutions of the council, the question was submitted to the electors of the city, and the requisite vote authorizing the purchase of the waterworks was obtained. The council thereupon, by appropriate resolution, agreed to purchase all the water pipe, stock, rights, privileges, and franchises of said companies for the sum of $85,000, and directed the issue of bonds of the city to be issued to that amount in payment thereof. The respondents refused to execute them, and these relators filed their respective petitions to the circuit court, praying for the writ of mandamus to compel their execution. At the time these bonds were issued, the city of Ironwood had a bonded indebtedness as follows: $40,000 of sewer bonds, and $150,000 of public improvement bonds. The bonded indebtedness, therefore, with the addition of this $85,000, would be $275,000. If the $226,000 of bonds outstanding against the Hurley Water Company should be classed as a debt of the city, the amount of the indebtedness authorized by its charter is largely exceeded, and the issue of these bonds was void.

The relators defend the action of the council upon the ground that the city assumes no responsibility for the payment of the bonds of the Hurley Water Company which cover all its property and franchises,...