Newburyport Water Co. v. City of Newburyport

• Decision Date: 24 February 1898
• Citation: 85 F. 723
• Parties: NEWBURYPORT WATER CO. v. CITY OF NEWBURYPORT.
• Court: U.S. District Court — District of Massachusetts

85 F. 723

NEWBURYPORT WATER CO. v. CITY OF NEWBURYPORT.

United States Circuit Court, D. Massachusetts.

February 24, 1898

Robert M. Morse and Lauriston L. Scaife, for complainant.

Albert E. Pillsbury and C. C. Dame, for defendant.

COLT Circuit Judge.

The present hearing was had on demurrer to the bill of complaint. The principal question raised by the bill is whether the Massachusetts act of 1894 (chapter 474), as construed by the state court, is in violation of the fourteenth amendment of the constitution of the United States. That act, as interpreted by the state court, allowed the complainant no compensation for the value of its franchises or on account of its future earning capacity or good will. The demurrer assumes the truth of the allegations contained in the bill which are properly pleaded, and we will only refer to such allegations as we deem material. It appears from the bill that the water company was duly incorporated under St. Mass. 1880, c. 235, for the purpose of furnishing the city of Newburyport with water, and that it conducted its business until January 29, 1895. Section 11 of its charter provided that the city should have the right, at any time after 10 years from the date of the completion of the waterworks, to purchase the property, and all the rights and privileges of the company, at such price as might be mutually agreed upon and, in case the water company and the city were unable to agree, the compensation was to be determined by three commissioners to be appointed by the state court. The city did not avail itself to the right to purchase under this act. In 1893 the legislature passed an act which authorized the city of Newburyport to supply itself with water. St. 1893, c 471. By section 12 of the act of 1893, it was provided that at any time within 60 days after the passage of the act, the water company might notify the mayor of Newburyport, in writing, that it desired to sell to the city its corporate property, and all the rights and privileges of the company and to execute and deliver to the city proper deeds and instruments in writing, conveying to the city the property aforesaid:

'Provided, however, the legal voters of the city of Newburyport, at legal meetings to be called in the several wards of said city within six months after said notification has been received as aforesaid, shall by a majority vote of the voters of said city present and voting thereon at said meetings, vote to purchase the aforesaid property upon the terms and conditions contained in this section, whereupon the property thus conveyed shall become the property of the city of Newburyport, and said city shall be liable to pay to said company the fair value of the property thus conveyed.'

Section 13 provided that:

'After the vote provided for in section 12 of this act, or provided the Newburyport Water Company does not so notify the said mayor within the sixty days, this act shall be submitted to the legal voters of the city of Newburyport for their acceptance or rejection, at legal meetings to be called in the several wards of said city within eight months from the passage of this act, and shall take effect from and after its acceptance by a two-thirds vote of the voters of said city present and voting thereon at said meetings.'

Within 60 days after the passage of this act the water company notified the city of its desire to sell under the provisions of the act. On August 25, 1893, the city, by a majority vote, declined to purchase the property, but on September 7, 1893, voted the acceptance of chapter 471 of the act of 1893, authorizing it to build new waterworks. The act of 1894 (St. 1894, c. 474), provided that within 30 days after the passage of the act the water company should notify the mayor of the city of Newburyport, in writing, that it desired to sell to the city 'all the rights, privileges, easements, lands, waters, water rights, dams, reservoirs, pipes, engines, boilers, machinery, fixtures, hydrants, tools and all apparatus and appliances owned by said company and used in supplying said city and the inhabitants thereof with water, said city shall not proceed to supply water to itself or its inhabitants under the authority of chapter 471 of the Acts of the year 1893, unless it shall have first purchased of said company the property aforesaid, and said company is authorized to make sale of said property to said city, and said city is authorized to purchase the same. ' The act further provides for a meeting of the legal voters to vote upon the question of purchase, and that, if the city shall vote to purchase, the water company shall execute and deliver to the city proper deeds and instruments in writing 'conveying to said city the property aforesaid, and said property thus conveyed shall thereupon become the property of said city, and said city shall pay to said company the fair value thereof, to be ascertained as hereinafter provided. ' And, further, that, in case the city and water company should be unable to agree upon the value of said property, the supreme judicial court shall appoint three commissioners to determine the fair value of said property for the purposes of its use by said city, and whose award, when accepted by the court, shall be final. 'Such value shall be estimated without enhancement on account of future earning capacity or good will, or on account of the franchise of said company.'

Within 30 days after the passage of this statute a meeting of the stockholders of the water company was held, and a vote was adopted to the effect that the company desired to sell to the city the property described in the statute, and notice of said vote was on the same day sent to the city; and on January 15, 1895, a majority of the legal voters of said city voted to purchase the property of the water company; and on January 29, 1895, the water company conveyed its corporeal property to the city, and in paragraph 26 of its deed it purported to convey 'all the rights, privileges, and easements heretofore acquired under chapter 235 of the Acts of the Legislature of Massachusetts for the year 1880, and now used by said company, of laying and maintaining water pipes and mains in said streets, and of making connections therewith for the purpose of supplying said city and the inhabitants thereof with water, and all property, property rights, corporate property, privileges, easements, waters, and water rights of said company, whether herein particularly described or not, and all the rights and franchises of said company, whether for supplying...