Neosho City Water Co. v. City of Neosho

• Citation: 136 Mo. 498,38 S.W. 89
• Parties: NEOSHO CITY WATER CO. v. CITY OF NEOSHO.
• Decision Date: 15 December 1896
• Court: United States State Supreme Court of Missouri

38 S.W. 89

136 Mo. 498

NEOSHO CITY WATER CO. v. CITY OF NEOSHO.

Supreme Court of Missouri.

December 15, 1896.

MUNICIPALITIES — CONTRACTS FOR WATERWORKS — VALIDITY — INTEREST — ESTOPPEL — SET-OFF — APPEAL — INSTRUCTIONS — REVIEW.

1. On appeal by a city from a judgment against it for annual water rental due under a contract for supplying it with water, it cannot urge that its revenues for each year were respectively insufficient to pay the rental accruing during it, where instructions given at its request were based on the ground that the evidence showed that they were sufficient.

2. Set-off, to be available, must be alleged.

3. Where a contract for the construction of a system of waterworks in a city, including hydrants for its own use, for which it is to pay an annual rental, requires the works, when completed, to be accepted by it, actual use by the city of the hydrants will estop it, in an action against it for the rental, from setting up nonacceptance of the works as a defense.

4. Rev. St. 1889, § 1589, prohibits a city of the fourth class from granting the exclusive right of furnishing it with a system of waterworks to any person for a longer term than 20 years. An ordinance of a fourth-class city granted such right for a term of 20 years, and provided for its extension for a further term of 20 years, if the city did not within the first term, as authorized, purchase the works. Held that, the grant for each term being distinct and severable, the grant for the first term was valid, whether that for the second term was valid or not.

5. In an action against a city for water rent under a written contract, payable in semiannual installments, where interest was not provided for on after-due installments, plaintiff is entitled to interest at 6 per cent. on such installments, without demand, under Rev. St. 1889, § 5972, providing for interest at 6 per cent., where no rate is agreed on, on moneys due on written contracts, and on accounts after demand.

In banc. Appeal from circuit court, Barton county; D. P. Stratton, Judge.

Action by the Neosho City Water Company against the city of Neosho. From a judgment for plaintiff, defendant appeals. Affirmed.

O. L. Cravens and Geo. Hubbert, for appellant. Jas. H. Pratt and Thurman & Wray, for respondent.

BURGESS, J.

Action by plaintiff, as assignee of S. V. Saleno, on a contract entered into between said Saleno and defendant for hydrant rental, by which the defendant was supplied with water, at a stipulated price, from July 1, 1892, to January 1, 1895. The case was tried in the circuit court of Barton county, where it had been taken by change of venue from Newton county. As the result of the trial, plaintiff recovered judgment in the sum of $8,424.45, from which judgment defendant appealed.

Defendant is a city of the fourth class, and by Ordinance No. 113, approved September 22, 1890, provided for the construction and maintenance of waterworks in said city, and contracted for a supply of water for the use of defendant for a term of 20 years, upon condition that the same should be ratified by a two-thirds majority of the legal voters of said city at a special election to be held for that purpose. A special election was held in said city for that purpose on the 15th day of October, 1890, in pursuance of an ordinance of the city, No. 114, at which Ordinance No. 113 was ratified and approved, more than two-thirds of the qualified voters of said city voting therefor. Thereafter, on the ____ day of ____, 1890, defendant, by its officers and agents, entered into a contract in writing with said S. V. Saleno for the construction and maintenance of a system of waterworks in defendant city, and to supply the same with water for the term of 20 years. By the terms of the contract it was agreed by defendant that, in consideration of the construction of said system of waterworks by said Saleno, defendant would pay him the sum of $2,000 per annum for the use of 50 hydrants on the first 5 miles of main required to be laid within the limits of the city, and the further sum of $30 per hydrant for each additional hydrant erected and maintained on each 400 feet of additional main required to be laid in addition to said 5 miles. The contract also provided that the city should have power to order additional mains to be laid in the city, in addition to the 5 miles to be laid under the contract, and that the hydrant rental should be paid semiannually on the 1st days of January and July of each year. Saleno constructed the waterworks, which were accepted and received by the city. He also constructed mains and hydrants according to the terms of the contract, which were accepted and used by the city. Defendant, in its answer, avers that said ordinances were and are illegal and void. It then alleges: "That covering the time for which hydrant rental is claimed in this action, and for each and every year of the city's existence, inclusive of the years 1890 and 1891, and down to the present time, the defendant city has necessarily levied and collected, for its use and purposes, annual taxes upon all taxable property, merchants' licenses, etc., within its limits, to the full extent of fifty cents on the hundred dollars assessed valuation for state and county purposes; and no other or greater taxes have ever been voted or authorized by a two-thirds vote of the qualified voters of the city voting at an election therefor, for any purpose whatever, and the whole of the revenue and income of the city lawfully provided, covering and including the aforesaid times and years past, to the present, have been used and consumed by the city in maintaining its government, and the performance of its usual and ordinary powers and duties, under the laws of the state and ordinances of the city; and the defendant had not and has not any power, under any vote of the people or otherwise, to levy further taxes or increase its income for the purposes of satisfying plaintiff's demands, nor any authority to incur the alleged indebtedness for the said rentals. That at the respective times of the said several annual rentals falling due, as by the alleged contract provided, the defendant city was already otherwise subject to its usual and necessary charges, obligations, liabilities, and disbursements, as aforesaid, and also indebted in and for such sums, and to such an extent, on account of sundry legal duties, liabilities, contracts, and undertakings, that all the revenue and income it did or could provide under the law was not materially more than sufficient for the necessary funds to maintain its efficiency as a municipality, and discharge its duties, pay its debts, and perform its current running obligations for the year; so that the city had no power or authority to contract or incur any of the said several, successive installments of indebtedness for hydrant rentals, as averred by plain...