Lake County Water & Light Co. v. Walsh
| Decision Date | 25 November 1902 |
| Docket Number | 19,722 |
| Citation | 65 N.E. 530,160 Ind. 32 |
| Court | Indiana Supreme Court |
| Parties | Lake County Water & Light Company et al. v. Walsh |
Rehearing Denied February 3, 1903.
From Lake Superior Court; H. B. Tuthill, Judge.
Suit by Redmond D. Walsh against the Lake County Water & Light Company and others. From a judgment for plaintiff, defendants appeal.
Affirmed.
Wood & Oakley, V. S. Reiter, Walter Olds and N. D. Doughman for appellants.
W. B. Reading, B. M. Cheney and A. F. Knotts, for appellee.
This is a proceeding to enjoin the city of East Chicago and William E. Williams, its treasurer, from paying to the appellant certain alleged water rents and charges for electric lighting; to set aside as fraudulent a deed of conveyance of a water-works plant and an electric light plant, executed by the city of East Chicago to the Lake County Water & Light Company; and for the appointment of a receiver to take possession of said water and electric light plants, and to operate them pending this litigation.
Issues were formed, and upon the trial the court found for the appellee, the plaintiff below, and, over a motion for a new trial, a judgment and decree were entered according to the prayer of the complaint.
The Lake County Water & Light Company appeals, and rests its demand for a reversal of the judgment upon the supposed errors of the trial court in overruling the demurrer to the complaint, and in denying its motion for a new trial.
The complaint states, in substance, that the appellee was and is a property owner and taxpayer of the city of East Chicago, a municipal corporation organized under the general laws of the State of Indiana; that on January 30 1900, the said city of East Chicago owned a water-works plant and an electric light plant and system, operating them for the convenience of the inhabitants of the said city, and the protection of their property; that prior to November 3, 1899, the said city had assumed the bonded debt of the East Chicago Light & Power Company, but that on said last named day it and its treasurer, Williams, had been permanently enjoined from paying said debt; that prior to November 9, 1899, said city had attempted to assume the bonded debt of the East Chicago Water-Works Company but that on said day said city and its treasurer had been permanently enjoined from paying the same; that afterwards, between November 9, 1899, and January 30, 1900, the mayor and common council of said city and the owners and holders of the bonds of the said East Chicago Light & Power Company, whose names were unknown to the appellee, entered into a conspiracy to defraud the taxpayers of said city, of whom the appellee was one, and by indirect means to bring about the payment of the bonded indebtedness of the said water company, and said light and power company; that in furtherance of said scheme, the said conspirators caused the said Lake County Water & Light Company to be organized as a private corporation; that on January 30, 1900, the said city, by its mayor and common council, conveyed the said water-works plant and electric lighting plant by deed to the said Lake County Water & Light Company, and put the said grantee in possession of the same; that the said conveyance was by quitclaim deed, and the consideration named therein was $ 60,000; that the property so conveyed included not only the land occupied and used for said plants, but also all the buildings, rights of way, street plants, and other property and appliances of said water-works and electric light companies, all of which were subject to a bonded indebtedness aggregating $ 60,000; that a pretended appraisement of the said property was made, but that it was irregular and void; that the only consideration for such conveyance was the assumption by the said Lake County Water & Light Company of the said bonded debts of the said water and electric light companies; that, to carry out the design of the said conspirators to subject the said city of East Chicago to the payment of the said bonded debts of the said companies, an ordinance was passed by the mayor and common council of said city granting to said Lake County Water & Light Company a franchise to maintain and operate said water-works plant for a term of thirty years, and binding said city to pay to the said Lake County Water & Light Company $ 1,480 per annum, in twelve equal monthly installments, for hydrant rentals for ninety-five hydrants; that an ordinance was also passed by the said mayor and common council granting to the said Lake County Water & Light Company a franchise to maintain and operate said electric light plant for a term of ten years from January 30, 1900, and binding said city to pay to the said Lake County Water & Light Company $ 4,840 per annum, in monthly installments, for lights for the public use; that all of said proceedings were part of a subterfuge by which said conspirators sought to evade the injunction before that granted against the said city prohibiting it from paying the said bonded debts of the said East Chicago Water-Works Company and the East Chicago Light & Power Company; that since January 30, 1900, Williams, as city treasurer, has paid out $ 4,840 in obedience to the order of the common council of said city of East Chicago, and in furtherance of the said scheme of the said conspirators to pay off the bonded debts of the said East Chicago Light & Power Company and the East Chicago Water-Works Company, and is about to pay the further sum of $ 1,260 to said Lake County Water & Light Company; and that, unless enjoined, he will continue to pay the sum of $ 1,260 per annum for a term of ten years, and the sum of $ 873.33 1/3 per annum for the further term of twenty years after said term of ten years; that the Lake County Water & Light Company, its officers and agents, threaten, if proceedings are taken against it, to enjoin the payment of said monthly rentals and charges, to shut down the said two plants, and to apply to the circuit court of the United States for the district of Indiana at the city of Indianapolis for the appointment of a receiver; and that the closing of said plants, even for a short time, would cause irreparable damage to said city of East Chicago and its inhabitants; and that the said Lake County Water & Light Company is, and always has been wholly insolvent. Copies of the several ordinances referred to, and of the deed mentioned in the complaint, were filed with and made parts of that pleading. Prayer for a temporary injunction restraining the city of East Chicago, and its treasurer, from paying said rentals and charges, for a judgment setting aside the said deed from the city of East Chicago to the said Lake County Water & Light Company, the appointment of a receiver to take charge of and operate said water and light plants pending this litigation, and that on the final hearing the injunction be made permanent.
It is not alleged that the city of East Chicago is indebted beyond the constitutional limit, or in any amount whatever. There is no averment of the value of the water and electric plants. Neither is there any charge that the rentals agreed to be paid by the city for fire hydrants and for electric lighting are unreasonable, nor that the city could obtain such service for lower prices, nor that it could operate the plants itself, and supply the city with water and light at less cost. The nature and terms of the judgment alleged to have been rendered enjoining the city from assuming the bonded debts of the East Chicago Water-Works Company and the East Chicago Light & Power Company, are not set out. The connection of the East Chicago Water-Works Company and of the East Chicago Light & Power Company with the property alleged to have been owned by the city of East Chicago and conveyed by it to the Lake County Water & Light Company, is not disclosed by the complaint. Nor do we think that the averments of the complaint are sufficient as a charge of fraud against the city, its treasurer, and common council, and the East Chicago Light & Power Company. The allegations of the complaint are not nearly so full and particular as could have been wished, and, in view of the omissions we have pointed out, the question as to the sufficiency of that pleading is reduced to very narrow limits.
The propositions of law stated by counsel for appellee, by which they seek to sustain the complaint, are these: The fourth, fifth, sixth, seventh, eighth, ninth, and eleventh propositions relate to the constitutional limitation of the right of a city to become indebted. "(10) Grants by legislature to a corporation, whether public or private, will be strictly construed." "(12) The fact that water rentals are collected by a city from private concerns does not constitute 'engaging in business for gain or profit.'"
The first, fourth, fifth, sixth, seventh, eighth, ninth, and eleventh propositions are wholly unimportant, and may be laid out of the case, for the reason, before stated, that the complaint contains no allegations to which they apply. On the other hand, if all of the positions assumed by the appellant should be conceded, still the complaint would be sufficient if a city organized under the general s...
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