Keokuk Water Works Co. v. City of Keokuk

• Citation: 277 N.W. 291,224 Iowa 718
• Decision Date: 18 January 1938
• Docket Number: 44071.
• Parties: KEOKUK WATER WORKS CO. et al. v. CITY OF KEOKUK et al.
• Court: United States State Supreme Court of Iowa

277 N.W. 291

224 Iowa 718

KEOKUK WATER WORKS CO. et al. v. CITY OF KEOKUK et al.

No. 44071.

Supreme Court of Iowa.

January 18, 1938

Appeal from District Court, Lee County; T. G. Garfield, Judge.

Action in equity for injunction to restrain the city and its officials from proceeding to construct a municipal waterworks plant and appurtenances, pursuant to a special election alleged to be void, and upon plans and specifications alleged to be violative of the statutes of Iowa. This was denied on behalf of defendants. The trial court held the election valid, upheld the subsequent proceedings, and most of the provisions of the specifications and form of contract, but did hold certain of the latter void, and enjoined the city from proceeding until these were remedied or modified to meet the legal requirements, and dismissed the plaintiffs' petition in all other respects. Costs were equally divided. Plaintiffs have appealed.

Affirmed.

Lane & Waterman, of Davenport, G. L. Norman, of Keokuk, and Clarence H. Dickey, of New York City, for appellants.

Stipp Perry, Bannister & Starzinger, of Des Moines, and J. E Newkirk and E. W. McManus, both of Keokuk, for appellees.

HAMILTON, Justice.

This action involves the legality of the proceedings whereby the city of Keokuk, Iowa, undertook to exercise the power which the Legislature has vested in " cities and towns * * * to purchase, establish, erect, maintain, and operate * * * waterworks," etc. Section 6127, Code 1935. The fact that power exists in the city to do what it undertook to do is not questioned. The bone of contention is the manner of doing it.

For approximately 50 years, the Keokuk Water Works Company, one of the plaintiffs and appellants, has been furnishing the City of Keokuk and its inhabitants with water. Since 1917 it has operated without a franchise, merely by the acquiescence of the city. In 1935 the city undertook to establish a municipally owned waterworks plant under the provisions of what is known in this state as the Simmer Law, enacted by the 44th General Assembly, chapter 158. A special election was held in October, 1935, resulting in a vote of 2,591 for the proposition and 1,048 against it. Pursuant to the election the city council employed an engineer to prepare plans and specifications. Notice of hearing on the plans, specifications, and form of contract was published, and also notice to bidders for the construction of the improvement. There was a hearing before the city council, and the bids for the construction of the improvement were opened, but, before the contract was finally let, this suit was commenced and the temporary injunction procured halting further proceedings until final hearing. On August 3, 1935, which was prior to the holding of the election, the City of Keokuk had made an application to the Federal Emergency Public Works Administration for a grant to aid in financing the construction of a municipal waterworks system. To this application the Keokuk Water Works Company made and filed resistance, and, at the time the proposition was submitted to the voters, no grant had as yet been made. Since the decision of this case by the trial court, the City of Keokuk has been notified by the Federal Emergency Public Works Administration that its application for a grant has been allowed, and that a grant of $157,500 has been allotted to the project of the construction of said plant.

The trial court held that the proceedings pertaining to the election were valid, and that the proposition of establishing such municipal waterworks was approved by an affirmative vote of the electors as required by law, and that the city was empowered to establish a municipal waterworks, either by purchase and improvement of the existing waterworks, or by constructing a new system. The court, however, found against the defendant city on two items; namely, that the specifications and form of contract for the construction of the said municipal waterworks plant did not comply with Code, § 1171-d1, as to preference for hired labor, and did not comply with Code, § 10310 and section 10312, as to the percentage of the payments earned by the contractor which shall be retained by the municipality for a period of 30 days after the completion and acceptance of the improvement, and that, as to the switchboard specifications, without being made more specific in one respect, they did not comply with the requirements of competitive bidding; but in all other respects the court approved the plans and specifications and form of contract, and all proceedings pertaining thereto. The court further found that the resolution employing the engineer to prepare the plans and specifications and supervise the construction of said improvement did not comply with the requirements of Code, § 6553, in that said resolution was not on file with the city clerk in the form in which it was finally prepared for 1 week before the final adoption thereof, and by order and decree the court permanently enjoined the defendants from entering into a contract for the construction of said municipal waterworks system until the above requirements had been complied with, and as to all other issues the petition of plaintiff was dismissed and costs were equally divided between the plaintiffs and defendants. From this decree the plaintiffs have perfected an appeal. The defendants did not appeal.

By the pleadings filed in the lower court the question was raised as to the right of the plaintiffs to maintain this action. Appellees admit in argument that the decree in effect is against the appellees on this point, and the question was not argued to the trial court, and, since the appellees have not appealed, this matter is not before us, and will be given no further consideration.

Statutory authority for the construction or acquisition of a municipal waterworks plant and distribution system is found in section 6127 of the Code, which reads as follows: " Cities and towns may purchase . Cities and towns shall have the power to purchase, establish, erect, maintain, and operate within or without their corporate limits, heating plants, waterworks, gasworks, or electric light or power plants, with all the necessary reservoirs, mains, filters, streams, trenches, pipes, drains, poles, wires, burners, machinery, apparatus, and other requisites of said works or plants, and lease or sell the same." Section 6131 of the Code provides in substance that no such works or plants shall be authorized, established, erected, purchased, etc., unless a majority of the legal electors voting thereon vote in favor of the same. Section 6132 provides that " the council may order any of the questions provided for in sections 6127 to 6131, inclusive, submitted to a vote," etc.

The question submitted by the city council to the electors in this instance read as follows: " Shall the city of Keokuk, Iowa, establish a municipal waterworks system by purchase and improvement of the existing waterworks or by constructing a new system, the maximum expenditure for the establishment of such waterworks system (exclusive of any gift or grant received from the government of the United States or any agency thereof) not to exceed the sum of $848,456.76, which shall be paid solely and only out of the earnings of said waterworks, without the incurring of any indebtedness therefor by the city of Keokuk, Iowa."

The appellants in their brief and argument present 15 different propositions wherein they contend the trial court erred. The two major propositions, as we view the situation, are the first and second: (1) The appellant contends that the trial court erred in refusing to hold that the proposition submitted to the voters was wholly invalid, in that it failed to state the maximum amount to be expended for the construction or acquisition of a municipal waterworks plant and distribution system; (2) the court erred in refusing to hold that the election was a nullity in that the proposition submitted to the voters was invalid because of duality. We will consider these propositions in the order mentioned.

It will readily be observed that their solution hinges largely on the construction of the statutory provisions above set out. The purpose of construction of statutes is to ascertain and if possible give force and effect to the manifest intent of the Legislature as embodied in the statute. Seavert v. Cooper, 187 Iowa 1109, 175 N.W. 19; State v. City of Des Moines, 221 Iowa 642, 643, 266 N.W. 41. The object and purpose which the law was intended to accomplish should be sought out, if possible, and, once ascertained, it is the duty of the court to give it force and effect, if this can be done without running counter to established legal precedents. It is the contention of appellants that the Legislature not only granted the power, but also prescribed the manner in which this power shall be exercised, and that this is plainly stated in the statute itself, and that the statute is not open to construction, and is mandatory. Appellees contend that the words " Maximum amount which may be expended" do not have reference to the total cost or extent as to the size, but since this language is found for the first time in the Simmer Law, which has to do only with payment out of earnings, it necessarily must have reference to the maximum amount which may be expended out of earnings from the plant; that, since in no event may any part of the cost come from taxation or out of the city treasury, the electors have no interest in the size of the plant or its total cost, but only in the sum which they may be called upon to pay on the initial cost out of earnings.

I.

The Simmer Law has been before this court and many phases thereof have been considered and the law interpreted, but in no...