President & Trs. of Vill. of Kilbourn City v. S. Wis. Power Co.

• Decision Date: 03 April 1912
• Citation: 149 Wis. 168,135 N.W. 499
• Parties: PRESIDENT AND TRUSTEES OF VILLAGE OF KILBOURN CITY v. SOUTHERN WISCONSIN POWER CO.
• Court: Wisconsin Supreme Court

149 Wis. 168

135 N.W. 499

PRESIDENT AND TRUSTEES OF VILLAGE OF KILBOURN CITY

v.SOUTHERN WISCONSIN POWER CO.

Supreme Court of Wisconsin.

April 3, 1912.

Appeal from Circuit Court, Columbia County; Chester A. Fowler, Judge.

Action by the President and Trustees of the Village of Kilbourn City against the Southern Wisconsin Power Company. From a judgment for defendant on its counterclaim, plaintiffs appeal. Modified and affirmed.

By chapter 462, Laws of 1901, certain persons were authorized to build a dam across the Wisconsin river at Kilbourn City, to a certain specified height, and were empowered to exercise the right of condemnation given by sections 1777 to 1777e, inclusive, of the Revised Statutes of 1898. The right or franchise granted by said act was thereafter conveyed to the defendant herein, the Southern Wisconsin Power Company, a corporation. In the fall of 1906, said corporation commenced the construction of the dam authorized by said act. The village of Kilbourn City owned a piece of land fronting on the Wisconsin river above the site of the proposed dam, on which was located the waterworks and electric light plant operated by said village. In order to carry out the improvement contemplated by the act referred to, it was necessary to flood the land on which the said plant was located. Negotiations were started between the plaintiff and the defendant for the purpose of enabling the defendant to flood the land, and at the same time to afford adequate compensation to the plaintiff for any damage it might sustain by reason of such flooding. Various discussions took place between the parties, and a number of propositions and counterpropositions were submitted. At one time, an agreement seems to have been reached between the representatives of the two parties, whereby the defendant agreed to furnish power to a certain amount, for the purpose of running the electric light plant and the water power plant, in consideration for which the village agreed to stand the expense of acquiring a new site and constructing a new plant. This agreement fell through, apparently because the village authorities thought that the power should be furnished indefinitely; while the power company desired to restrict its obligation to a period of 25 years. The contract submitted by the power company was dated in March, 1907. Thereafter negotiations continued, without any definite result, until the month of August, 1908, when a proposition was submitted by the defendant and accepted by the plaintiff. By this proposition, the defendant agreed to raise the land around the pumping plant for an area of 50x250 feet to a height above extreme high water, and to raise the wells to the same height, and to build them in such a manner as to preserve the quality of the water; also to build a pumphouse over one of the wells and install a motor therein with a capacity equal to 500 gallons per minute, the village to pay one-half of the cost of the pump and motor, but not to be called upon to pay to exceed $1,000 in the aggregate. In addition, defendant, through its representative, offered to furnish free power for operating the water and light plants for a period of 25 years. All other changes required by raising the water in the dam were to be paid for by the village. This proposition provided that a formal contract was to be entered into between the parties within 10 days. Some disagreements of a serious nature arose after this proposition was made and accepted, and it was withdrawn by Mr. Swenson, acting in behalf of the defendant, and the village board passed a resolution rescinding its acceptance of the same. In the meantime, the village retained attorneys, and negotiations were thereafter carried on between the attorneys for the village and the power company, which did not result in bringing the parties together.

In October, 1908, the plaintiff commenced an action to enjoin the defendant from raising any head of water on its dam in such a way as to overflow or encroach upon the land of the plaintiff, and on November 24, 1908, an injunctional order was procured, which enjoined the defendant, during the pendency of the action, from setting the waters of the Wisconsin river back, so that they would overflow in any way, or to any extent damage or interfere with, the real estate owned by the plaintiff, or with the waterworks or electric light plant located on said real estate. At this time, the work of building the dam and power plant and necessary equipment had been in progress for nearly two years. The dam was nearly completed, and the power plant was well under way. When the injunction was served the defendant had nearly a million dollars invested in the improvement. It also appeared from the testimony that the money used was largely derived from the sale of bonds; that the bonds were guaranteed by the bonding house that had negotiated the same; and that the holders thereof were threatening to compel the bonding house to take back the bonds and refund the moneys paid therefor, if there was any interruption in the progress of the work. It further appeared that it would be impossible to sell any other bonds while the injunction was in force, and that it was quite probable that the enterprise would end disastrously, unless the injunction was set aside. It also appeared that, in order to complete the plant, it was necessary to spend in the neighborhood of a million dollars in addition to that already spent, and that the bonding house had advised the defendant to get rid of the injunction on the best terms it could, but to get rid of it in any event, if such a thing were possible. With this situation confronting it, the defendant submitted as its ultimatum the contract involved in this action, which bore date February 6, 1909, and was executed by both parties. By this contract, the defendant agreed to purchase at its own expense, and cause good title thereto in fee to be vested in the plaintiff, a tract of land of such size and in such locality, at or in the vicinity of the village, as might be mutually selected by the parties; and the defendant also agreed to construct at its own cost and expense all the wells and reservoirs, and make all the necessary improvements to the land thus selected and purchased to derive therefrom an adequate supply of water for the use of the plaintiff and its inhabitants for all purposes, which water should equal in quantity and sanitary quality that derived from the present waterworks plant of the plaintiff. Defendant also agreed to make the necessary connection between the waterworks established upon such new locality and the present distribution system and water tower of the plaintiff, and that the improvements to be placed in such new location should constitute a complete electrically driven waterworks pumping plant ready for operation, with improvements, together with wells and reservoirs, the same to be made and constructed in accordance with the plans mutually agreed upon. It further provided that the quality of the water was to be determined by tests made by the state hygienic laboratory of Wisconsin. Defendant also agreed to make the necessary connections between its power plant and the new waterworks and electric light plant, so as to carry current thereto. By this contract, defendant further agreed to raise certain streets in the village, and to keep the same in repair for a stipulated time, and to build a new concrete bridge over what was designated as “Barney's Run,” not less than nine feet above the ordinary stage of water; also to protect the abutment of the bridge at Superior street. It was further provided that all the old machinery, pumps, boilers, motors, switchboards, buildings, and other apparatus on the present waterworks plant, after the new one was in operation, should belong to the plaintiff, and should be removed and sold by it. In addition to the foregoing, the defendant agreed to pay to the plaintiff from the time of the completion of the dam and the commencement of the operation of its plant, but not later than January 1, 1910, and as long as said dam was maintained in the Wisconsin river, the sum of $3,500 for each and every year of the first five years, and for each succeeding term of five years continuously thereafter the sum of $3,500 per year, together with a sum annually in addition thereto equal to $250 for each additional hundred persons or major portion thereof of the increase in the population of said village of Kilbourn City above 1,200, as shown by the next census, state or national, after the expiration of each five-year term; but in no event should the annual payments be less than $3,500 nor more than $4,500. It was further provided that said payments should be made semiannually, beginning six months after the time of the commencement of the operation of the power plant, but not later than January 1, 1910.

On its part, the plaintiff granted to the defendant the right to overflow the lands on which the old waterworks plant was situated, and it was further agreed in the contract that the defendant should furnish and the plaintiff should take from the power plant of the defendant, at current legal and reasonable rates, sufficient power to operate the waterworks pumping plant, and also a sufficient amount of electric current for supplying the plaintiff and its inhabitants with such light, heat, and power as may be obtained from an ordinary fixture.

The power plant was completed on August 6, 1909, and the first semiannual payment of $1,750 became due and payable under the contract on February 6, 1910, and this action was brought for the recovery of the same. The answer, in substance, set forth that the contract was unenforceable, because void under the public utilities law and for other reasons. The defendant interposed a counterclaim, alleging that it furnished certain current to the plaintiff by virtue of the aforesaid contract, and that there was due it...