Keith v. City of Cave Springs

• Decision Date: 27 March 1961
• Docket Number: No. 5-2314,5-2314
• Citation: 344 S.W.2d 591,233 Ark. 363
• Parties: E. L. KEITH et al., Appellants, v. CITY OF CAVE SPRINGS, Arkansas, a Municipal Corporation, Appellee.
• Court: Arkansas Supreme Court

Page 591

344 S.W.2d 591

233 Ark. 363

E. L. KEITH et al., Appellants, v. CITY OF CAVE SPRINGS, Arkansas, a Municipal Corporation, Appellee.

No. 5-2314.

Supreme Court of Arkansas.

March 27, 1961.

Crouch, Jones, Blair & Cypert, Springdale, for appellants.

Wade & McAllister, Fayetteville, for appellee.

JOHNSON, Justice.

This appeal involves a mandatory injunction. Prior to September 9, 1950, the water supply and distribution system of the City of Cave Springs consisted of individual wells and pressure pumps. No city water service was available.

On September 9, 1950, the city entered into a 25 year contract prepared by E. L. Keith whereby the latter agreed to sell and deliver to the city water suitable for industrial and domestic consumption under pressure at a gate valve in the street near the northwest corner of Lake Keith (a small impounded body of water fed by a spring known as Cave Springs) at the rate of 20 cents per thousand gallons. The contract which was duly recorded on May 7, 1951, among other things, provided that E. L. Keith would 'promptly repair any part of his equipment that might fail to deliver the water to the City'; and that Keith would 'install and maintain an automatic chlorinator to purify said water so sold.' The contract further provided that Keith would furnish 'all the water that said City wishes to purchase, subject to the capacity of his present pumping facilities,' and 'if anything should happen to the spring so it will not furnish good water in sufficient quantity to operate the water wheel and supply the need of the City, that E. L. Keith is not bound to purchase additional equipment.'

The water originally acquired by the city under its contract with E. L. Keith flowed by gravity from the mouth of Cave Springs, passed through a trough and dropped downward from the end of the trough onto a water wheel located in front of the spring. A shaft extended from the water wheel into a well house where the valves, belts, and other mechanisms of a pump were housed. The turning of the water wheel pumped the water up into a storage tank situated on the top of a hill above the spring. From the storage tank, the water was pumped into an adjoining tower tank from where it flowed to the gate valve and thence into the city's distribution lines.

At the time the contract was entered into, E. L. Keith was the owner of a small resort area known as Lake Keith Resort consisting principally of the spring, the lake, some dwellings, fish hatchery, apartment houses, and other resort facilities. Water for these installations flowed through private water distribution lines owned by Keith from the same water storage tank which supplied the city.

In 1950 the city had 10 to 15 water customers and its own distribution system consisted of one water main extending from Lake Keith down main street through the business district to the north end of the city limits. A year later Keith loaned the city money to extend the city's distribution lines to the south end of town and to other places within the city.

Keith soon discovered that the water wheel would not turn fast enough in the dry summer months when the spring was low to force enough water into the elevated storage tank to supply the needs of the city as well as the needs of the Lake Keith Resort occasioned by the construction of a swimming pool. In the words of E. L. Keith, 'I knew the city was using out of it and me using and the spring low, well we had to have some other kind of facilities to pump enough water during that real dry year.'

On or about 1952 or 1953, Keith voluntarily installed an electrical pump, which also activated the chlorination process in the well house to work in conjunction with the existing water wheel. From that time until on or about August of 1959, both the water wheel and the electric pump working together or separately forced enough water into the water storage tank to supply all of the needs of Lake Keith Resort, which included a fish hatchery, apartment houses, filling station, cafe, swimming pool, and other dwellings, obtaining water through Keith's private distribution lines, and all of the needs of the city which included a school, business and residential establishments, chicken raisers, the city's own fire department and other water users.

Keith operated the water supply system and related pumping facilities and supplied water to the city and to the lake Keith Resort installations without incident from September 9, 1950, to February 15, 1957, when he and his wife sold and conveyed to Joe M. Meyer and Wilma B. Meyer, husband and wife, the real estate upon which Lake Keith Resort and said water supply system, pumping facilities, swimming pool, storage tanks and other installations were located. The Meyers likewise operated the water supply system and related pumping facilities and supplied water to the city and to Lake Keith Resort installations without incident from February 15, 1957, to June 14, 1957, when they conveyed the same premises to the Northside Supply and Development Company, a Missouri corporation, which also operated the water supply system and related pumping facilities and supplied water to the city and to Lake Keith Resort installations without incident until August 1959.

The owners and incorporators of the Northside Supply and Development Company were Paul Johnson and Eurtis Johnson, residents of Springfield, Missouri, brothers of F. D. (Dee) Johnson, one of the defendants herein. Dee Johnson had arranged with his brothers to live in a room in a hotel at the resort owned by his brothers and to assist Chester McCamey who was in charge of the water system and related pumping facilities; Dee Johnson arrived to assume his duties at the resort on or about the middle of August 1959; he spent part of his time at the resort and part of his time in Springdale; he had authority from the Northside Supply and Development to receive check payments for water purchased by the City of Cave Springs from the water supply owned by the Northside Supply and Development Company, to endorse the checks, to get the cash on them and to deposit them in a bank at Bentonville, Arkansas, in an account owned by the Northside Supply and Development; in addition, he had authority to superintend the building of houses in Springdale and vicinity for Northside Supply and Development Company, to hire laborers, to fire them, and to pay their wages either from checks drawn by him on the same bank account or from the proceeds received from the checks received from the city and endorsed by him. Mr. Keith characterized the relationship of Dee Johnson and Northside Supply and Development Company as follows: 'He is their agent here, working for them and building some houses over there is all I know.'

Ex-Mayor Bright, who had signed the contract in 1950 for the city, testified that the first report he had of a shortage of water was in August or September of 1959.

Wilbur Bolin, member of the Cave Springs City Council and Water Commissioner, testified that water users in the city had been out of water several times in the last six or eight months; that upon investigation he would find the pump shut off and the water tower dry; that he would talk to Dee Johnson about it and that eventually Johnson would get the pump started again; that this happened a lot of times twice a week; that the school had been out of water several times; that on Wednesday, April 13, 1960, he found there wasn't any water--that the boy (Johnson) went in there and turned some valves on, opened the water to where more would pour on the wheel but in about an hour and a half later the people would call and report that they were still out of water; that both Mrs. Pattishall and Ed Curtis reported to him that they were out of water; that Mrs. Pattishall lives east of the school house and Ed Curtis lives south of the school house; that they live on about the same elevation as the water tank and the school--all on high ground; that the city has never run out of water except when the storage tank was dry; that on one occasion he found the electric pump shut off and observed the storage tank empty; that he and others would go get Dee Johnson when this occurred and get the pump turned on; that these incidents of water shortage occurred a dozen or two dozen times; that on the first two or three occasions when he talked to Mr. Johnson about it, Mr. Johnson's answer was, in substance, that he was losing money on it; that the operation of the electric pump by itself was probably sufficient to keep the water storage tank full; that water shortage troubles were encountered on April 9, April 13, and April 14, 1960; that he has visited the spring several times when the trough that directed the water onto the water wheel was placed in such a manner that the water was running over the top of the water wheel without touching it; that he has visited the spring when neither the water wheel nor the electric pump were working.

Mayor Person testified that he told Mr. Johnson that he would like to have some water because the school children were out of water; that on one occasion he couldn't find Dee Johnson and neither the water wheel nor the electric pump were running; that he made a visit to the pumps on Saturday, April 9, 1960, and that the water wheel was off, the moss and vegetation on the wheel were dry, the electric pump was running but there was no water in the tower; that on Wednesday, April 13, 1960, he made a trip to the spring because 'we were out of water' and found that the electric pump 'wasn't pumping if it was running and the water wheel was running but wasn't pumping'; that last Saturday 'the water wheel was not running, the electric pump was running but it didn't sound like it was pumping and there was no water.'

E. L. Keith testified that Mr. Johnson had had to make repairs to the electrical pump that he installed; that when there was no water in the tank the...