Louisville & N.R. Co. v. City of Covington

• Decision Date: 20 June 1919
• Citation: 184 Ky. 811,213 S.W. 568
• Parties: LOUISVILLE & N. R. CO. v. CITY OF COVINGTON ET AL.
• Court: Kentucky Court of Appeals

213 S.W. 568

184 Ky. 811

LOUISVILLE & N. R. CO. v. CITY OF COVINGTON ET AL.

Court of Appeals of Kentucky.

June 20, 1919

Appeal from Circuit Court, Kenton County.

Mandamus by the Louisville & Nashville Railroad Company aginst the City of Covington and others. Judgment of dismissal, and plaintiff appeals. Reversed, with directions.

S.D Rouse, of Covington, and Benjamin D. Warfield, E. S. Jouett and H. L. Stone, all of Louisville, for appellant.

J. E Sheperd, of Covington, for appellees.

SAMPSON J.

The appellants, Louisville & Nashville Railroad Company et al., own and operate a line of road through the city of Covington crossing several of its streets. It also has yards and repair shops in and adjacent to said city. Its road was constructed more than 60 years ago, and as much as 30 years ago it entered into a contract with the city of Covington by which the city of Covington was to and did supply the railroad company with water for its engines, yards, and shops for all purposes, at the price of three cents per 100 cubic feet, and this continued for 25 years. On its termination, the city raised the price to ten cents per 100 cubic feet of water, over the protest of the railroad company. An investigation was then started to ascertain the exact cost of the water supplied by the 100 cubic feet, and it was ascertained to be 7.2 cents, whereupon the city offered to supply the railroad company with water at 7 1/2 cents per 100 cubic feet, but this the railroad contended was exorbitant and much above what it would cost it to furnish its own water. Thereupon it started excavating preparatory to laying a water main along its right of way from a proposed water pump station on the bank of the Licking river, crossing under some 14 streets of the city of Covington, so as to supply water to its engines and yards in Covington, and also at its shop at De Coursey and other points along its right of way in said city. When the railroad company was about to make an excavation crossing a street, the police authorities of the city of Covington interfered and stopped the work. The railroad company felt aggrieved by the action of the city and instituted an action in the Kenton circuit court, praying a mandatory injunction against the city of Covington and its police authorities staying their interference with the proposed plan of excavating for and laying a water main along the right of way of the railroad company and especially at the street crossings. This relief was refused by the Kenton circuit court, and on appeal to this court it was held that the statutes under which the railroad was proposing to proceed did not confer upon the company absolute right to construct its road upon or across any streets, but only the right to do so upon such terms and conditions as shall be agreed upon between the corporation and the authorities of the city; and further that the railroad company could not, upon the mere rejection of its own terms and conditions, proceed to lay its water main and enforce its right by enjoining the city authorities from interfering with the work. The opinion concluded as follows:

"But if it be conceded that the city may not arbitrarily refuse to agree upon terms and conditions, but is under the mandatory duty of agreeing upon reasonable terms and conditions, a question not decided, then the company's only remedy, if it has one, is by mandamus or mandatory injunction to compel the city authorities to exercise their discretion in good faith."

The judgment of the lower court sustaining demurrer to the petition and dismissing it was affirmed by this court.

The suggestion contained in the concluding paragraph of the opinion referred to was seized upon by the railroad company, and this suit was instituted on April 3, 1919, by the Railroad Company United States Railroad Administration, Walker D. Hines, Director General, against the city of Covington, its mayor and commissioners, praying a writ of mandamus directing and ordering the city and its officers, and each of them, to agree with the railroad company upon reasonable terms and conditions for the laying of water mains under the surface of the several streets named in the petition, as traversed. After manifesting its right to sue, it is averred in the petition that the appellants are unable to secure an adequate supply of water from the city of Covington, that the price charged for water by the city is unreasonably high, and that the railroad company has a right to construct its own water mains through the city and convey its supply of water therein because same is essentially incident to its business. To this petition a general demurrer was filed and overruled by the trial court. The allegations of the petition were traversed by the answer, and it was affirmatively pleaded by the city that it had by legislative authority and by reason of the construction, maintenance, and operation for many years of a municipally owned water plant, the exclusive franchise for furnishing water to consumers within the city. A general demurrer was filed to the answer, evidence was taken in support of the issues, and an extended stipulation, signed by the parties, was filed and the case submitted upon its merits, whereupon the court denied plaintiffs' prayer for mandamus, dismissed the petition of the railroad company et al., and it appeals to this court.

It is the contention of the appellants, the company: (1) That it has the right under its franchise, as a railroad company, to lay water pipes along its right of way under the surface of the streets of the city of Covington; that such a right is necessarily incident to the business of the railroad because water is an essential in the ordinary conduct of its business. (2) Admitting that the city has the exclusive franchise over its streets and alleys for the laying of pipes for the distribution and sale of water to its inhabitants, appellant insists that such a franchise does not prevent it from laying water mains for the purpose of supplying its own water needs for two reasons: (a) Because its charter, granted by the state Legislature previous to the granting of the said city charter, vested it with the right and power so to do; (b) it does not propose to distribute or sell water in competition with the city, nor otherwise use its pipes than in supplying its own water needs.

For the city of Covington it is insisted: (1) That the railroad company has no implied power to make excavations in or across the streets to lay water mains therein, by reason of previous permission to construct its railroad across the surface of streets; (2) the construction of the water system in the city of Covington by the railroad company impairs the exclusive franchise under which the city furnishes water to its inhabitants.

This litigation results from the desire on the part of the railroad company to avoid buying water from the city at the price proposed, because the railroad calculates that it can provide water for its own use at less expense than the city is proposing to perform the same service, and the city is anxious to retain the business which it has with the railroad company, out of which it realizes a profit. The city has invested about $2,000,000 in its water plant, and is equipped to supply water to the railroad company with little additional cost above what would be necessary if it did not have this contract. It is also supplying the Chesapeake & Ohio Railroad Company with water at the price of 7 1/2 cents per 100 cubic feet, and this railroad is not objecting to the price. Other large consumers are no doubt patrons of the city plant in addition to the individuals who consume water in their homes and places of business.

We do not, however, regard the commercial element in this case as controlling, nor is it entitled to the slightest influence in view of the conclusion we have reached upon the main question involved: Is the laying of a water main along the right of way to supply water necessary in the operation of the business of the company such an incident to the construction and maintenance of the road as may be regarded and classed as included in the grant of a right of way?

May a railroad company construct water mains along its right of way crossing under the surface of streets in an incorporated city, subject only to such reasonable regulations, terms, and conditions as shall be agreed upon between the railroad company and the authorities of the city under subsection 5 of section 768, Kentucky Statutes? The composite answer of courts and text-writers generally throughout this country of this question is that a railroad may construct and maintain water mains under the surface of streets along its right of way for the purpose of supplying water for its own use, essential in its business, but not for any other purpose--at least for no purpose not necessary or essential to the business of the corporation. The leading case upon this subject in this country is Canton v. Canton Cotton Warehouse Co. et al., 84 Miss. 268, 36 So. 266, 65 L.R.A. 561, 105 Am.St.Rep. 428, decided in 1904. In holding that a grant to a railroad company of the right of way to cross highways in municipal corporations includes the right to lay along the right of way pipes to conduct water to and supply locomotives and other needs attendant upon the operation of the railroad, the Mississippi Supreme Court said:

"The only real question in this case for decision is this: Did the grant of the right of way, or the acquisition of the right of way by 40 years' use, confer upon the railroad the right to lay the water pipes set out in the testimony, under the ground forming part of the right of way, where the pipes would run under the streets in question, of the city of Canton?

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