Lonoke v. Bransford

• Decision Date: 24 November 1919
• Docket Number: 14
• Citation: 216 S.W. 38,141 Ark. 18
• Parties: LONOKE v. BRANSFORD
• Court: Arkansas Supreme Court

216 S.W. 38

LONOKE v. BRANSFORD

141 Ark. 18

No. 14

Supreme Court of Arkansas

November 24, 1919

Appeal from Lonoke Chancery Court; John E. Martineau, Chancellor reversed.

Decree reversed, and cause remanded.

Trimble & Trimble and Chas. A. Walls, for appellant.

1. The decree should be reversed because (1) there was a bona fide contract between Bransford & Son and Lonoke whereby water was to be furnished during the life of the contract at a stipulated price and (2) Kirby's Digest, sections 5445-5448, inclusive, do not authorize appellee or the court to fix arbitrarily his own rates, and (3) there has been no mutuality of contract between the town of Lonoke and Bransford & Son upon any other rate than that set out in the original contract and neither the court nor appellee could arbitrarily fix a rate without the consent of the town council. To "stipulate" means to make an agreement bargain, settle terms, etc. 7 Words & Phrases, 6659; 113 F 718. See also 88 N.E. 785. "Stipulated" as used in the contract of 1905 clearly referred to some amount that had been definitely fixed and agreed upon. This is conclusive of the fact that $ 1 a month for residences was the stipulated price referred to.

2. The rates having been fixed by the city council, the presumption is that they are reasonable, and the burden of proof is upon the company to show affirmatively that they are not. 99 Ark 178; 54 Id. 112.

3. The finding of the court is that the contract is not governed by the rules applicable to contracts of individuals is not according to law. 80 Ark. 108; 211 S.W. 664; 206 U.S. 768. The court erred in enjoining the council from enforcing the rate which has been in force for 18 years.

J. B. Reed and Carmichael & Brooks, for appellees.

1. It becomes a mere matter of ordinance provision as to the fixing of the rate, and if it is unreasonable the court has a right to enjoin it. 3 Dillon on Mun. Corp. (5 Ed.), § 1327; 80 Ark. 108; 99 Id. 178. The law is clear that a franchise can not be repealed by a contract between a member of a town council and a public utility. 211 U.S. 265.

2. If there was a contract, as appellant claims, it would be inconsistent with the franchise and beyond the power of the committee of the town council to make and could not mean that the public utility should furnish an unlimited amount of water to one person and a smaller amount to another at the same price. The committee was not given power to fix the price at $ 1 and the rate of $ 1 was erased. It put the contract in the language of the resolution.

3. The court had a perfect right and full power to enjoin the carrying out of such a contract. If the rates were unreasonable and confiscatory the court had the right to set them aside. There must be mutuality in the contracts, not only in the making but enforcement thereof. Kirby's Digest, § 5445. The council may raise or lower the rates, but courts can modify a contract at the instance of a public utility. A binding contract must be binding on both parties. 101 Ark. 223. The statute gives the town the right to fix the rate. 99 Ark. 178 settles this case in favor of appellee. 204 S.W. 386. See also 225 F. 920; 206 U.S. 496; 194 Id. 517; 246 Id. 178; 248 Id. 429; 244 Id. 13; 204 S.W. 1074; 207 Id. 799; 199 Id. 999; 205 Id. 36; 192 Id. 958; 102 A. 901; 211 S.W. 664.

HUMPHREYS J. Mr. Justice SMITH dissents.

OPINION

HUMPHREYS, J.

Appellee instituted this suit against appellant in the Lonoke Chancery Court to enjoin the city and its officers from enforcing a water rate of $ 1 per month for residences, $ 1.50 for livery stables, and $ 2 for hotels and inns, upon the grounds, first that appellee had not entered into a contract with appellant to furnish water at the rates specified; second, that, if such a contract was made, it was inconsistent with the franchise granted to the predecessors of appellee; and, third, that, if such a contract were made, and was consistent with the franchise, it was confiscatory of appellee's property, and not enforceable as a contract. Appellant filed answer, denying each material allegation in the complaint.

The cause was submitted to the court upon the pleadings, ordinance No. 33 granting a water franchise to A. J. Edmondson and W. H. England, predecessors of appellee, the written contract between appellees and appellant pertaining to the water rate, certain minutes and records of the town, and the testimony of certain witnesses, upon which the issues were found for appellees and a judgment rendered by the court perpetually enjoining the enforcement of the rates fixed by the town council of Lonoke. From the findings and decree of the chancery court, an appeal has been prosecuted to this court, and the cause is before us for trial de novo.

It is first insisted by appellant that, according to the weight of the evidence, the predecessors of appellees entered into a contract with the town of Lonoke to furnish the inhabitants thereof water at the rate of $ 1 for residences, $ 1.50 for livery stables and $ 2 for hotels and inns, and that appellee renewed the contract at the same rate in 1905. The written contract entered into between appellant and appellee in 1905 contains the following provision: "It is further agreed that said parties of the second part will continue to furnish water at the same stipulated price until the termination of their franchise."

R. L. Sawyer, serving as an alderman when the water franchise was granted to Edmondson and England, appellee's predecessors, testified that the rate was fixed by resolution at $ 1 per month for residences, and later amended by fixing the rate on livery stables and hotels at $ 1.50 per month.

Charles G. Miller, who procured the franchise for Edmondson and England, testified that it was procured on the understanding that the public utility would furnish water at the rate of $ 1 per month for residences and business houses, and $ 1.50 per month for hotels and livery stables; that the town refused to grant the franchise on any other condition; that he subsequently negotiated the sale of the plant to Bransford and Daniels for $ 1,000 less than the original price asked, on account of the low water rate theretofore agreed upon.

T. M. Fletcher, mayor in 1905, 1906 and 1907, testified that the town owned the plant at the time he was mayor, and fixed the rate at $ 1 a month to the consumer; that, about three years after he retired as mayor, the town sold the plant; that, after the change, the rate remained the same, except for livery stables and hotels.

J. M. Gates, mayor of Lonoke for five years, testified that he was familiar with the water rates fixed by the council, the same being $ 1 per month for residences and business houses, and $ 1.50 per month for livery stables and hotels.

The mayor of Lonoke, at the time he gave his evidence, testified that W. Y. Bransford discussed the question of raising the water rates with him in June,...