Profile Cotton Mills v. Calhoun Water Co.

• Decision Date: 30 June 1914
• Docket Number: 626
• Citation: 66 So. 50,189 Ala. 181
• Parties: PROFILE COTTON MILLS v. CALHOUN WATER CO.
• Court: Alabama Supreme Court

66 So. 50

189 Ala. 181

PROFILE COTTON MILLS v. CALHOUN WATER CO.

No. 626

Supreme Court of Alabama

June 30, 1914

Rehearing Denied July 25, 1914

Appeal from City Court of Anniston; Thomas W. Coleman, Jr., Judge.

Bill by the Profile Cotton Mills against the Calhoun Water Company to establish a license and to declare a resulting or constructive trust. Decree for respondent, and complainant appeals. Affirmed.

The bill seeks to establish a license in favor of complainant for the maintenance of a dam and water pipes upon respondent's land, or to declare a resulting or constructive trust for complainant either in the land itself or in an easement to draw therefrom a water supply for the operation of its cotton mills, and the use of its employés on the land adjoining the tract in question, or else to fasten an estoppel on respondent with respect to complainant's asserted right in the premises. Respondent's title to the water tract is derived from one George P. Ide, and as to the matters herein litigated respondent stands in his shoes. The bill shows that Ide acquired the water tract by piecemeal by several distinct purchases from different persons on June 27 1899, August 17, 1900, and September 25, 1900. It shows also that complainant corporation was organized on August 8, 1900 following a declaration made for that purpose by Ide and two others. Of the 1,000 shares of capital stock 685 shares were owned by residents of New England, about 75 shares by local shareholders, and 238 shares by Ide. The relation of complainant and its interest to Ide and his 10-acre water tract is shown by allegations which may be summarized as follows:

(1) By means of the said purchases and conveyances said Ide acquired a tract of land containing altogether about 10 acres, through which flowed the said Spring branch, a water course or stream having its origin in the said public spring in Jacksonville, as aforesaid, and said Ide holding the legal title to said tract of land across said Spring branch, but at the cost and expense of your orator, of which he was at the time chief executive and managing officer; and he also erected, near by said dam, another dam, across the said Williams branch, with its western abutments upon your orator's land, and its eastern abutments on the land so held by him, as aforesaid. In this way he accumulated upon said land a body or pool of water, above the dam on the said Spring branch, and also by means of the dam on the Williams branch caused the water therein to be backed or flowed into the Spring branch on said land. And he thereupon laid a pipe line, beginning on his said land and leading from the Spring branch dam a short distance thereon to the middle of the said stream, and thence over and through the lands of your orator to a reservoir, where he accumulated the water from said streams, for the purpose of supplying the boilers, for generating steam for driving the machinery in said cotton mills, and for the purpose of protecting your orator's said property from loss or destruction by fire. Your orator further shows that the said Ide, holding the legal title to said 10-acre tract of land, also erected a pumping house thereon, and laid water pipes from the said spring to the land so held by him, and thence over, upon, or through said land, at the cost and expense of your orator, and thereby secured a water supply for the said cotton mills, for drinking purposes, and for your orator's houses rented or leased to its employés, as aforesaid, for drinking and domestic purposes. Orator charges that all this was done by said George P. Ide for the use and benefit of orator.

(2) Ide promoted the organization of plaintiff corporation thereafter he had the sole and exclusive management of its business and finances until 1911, as its alter ego, selected and acquired its site, and bought and installed its plant expending therefor several hundred thousand dollars. As manager of the company Ide was charged with the duty of securing an adequate supply of water for the operation of the mills and the use of its employés; he undertook to do so, and in fact acquired the several parcels of land composing the water tract (except a one-third interest in an unimportant parcel) solely for the uses stated.

(4) The water rights afforded by the Ide water tract were and are indispensably necessary to the use and operation of complainant's plant, and without them its employés and their families, numbering about 900 cannot occupy its houses provided for them, to the great inconvenience and loss of complainant.

(5) Ide was the only officer or important stockholder on the ground, and the company, including all of its nonresident stockholders, relied entirely upon Ide to provide what was necessary for the construction and the successful operation of its plant.

The bill further shows that complainant's first mill was completed and put in operation in 1905, and that by the action of Ide and the other stockholders in 1907, another mill was constructed and put in operation in 1908, with about $500,000 as additional paid-up stock, which sum was expended by Ide for the company, he retaining the actual management until April, 1911. It is alleged that this mill was built and equipped upon the faith or agreement or understanding between Ide and the company for the use of the water supply from this water tract, and that said mill could not have been, and cannot be, successfully or practically operated without such water supply. On this basis it is charged that Ide and his successors are estopped to deny or interfere with complainant's easement to its present water supply, in the matter of which it has expended large sums of money. It is charged, on information and belief, that the respondent Calhoun Water Company, is not and does not intend to be engaged in any active business. It is shown that Ide severed his connection with complainant company in April, 1911; that he became a bankrupt, and this water tract was sold in May, 1913, and passed to respondent corporation, when it was organized in July, 1913; that in November, 1913, respondent served a notice on complainant to immediately vacate the water tract in question and remove all of its pipes or other property therefrom, and to discontinue the use thereof, and within about 30 minutes thereafter Ide and the respondents through its servants broke complainant's water connection on said tract, stationed armed guards there, and forbade complainant from entering and repairing said connections. Pursuant to the prayer of the bill a temporary restraining order was made without notice, forbidding respondent from interfering with complainant's restoration of its pipes as formerly used. The answer admits Ide's acquisition of the water tract; that he was active with others in promoting and organizing the complainant company, of which he became secretary and treasurer, and that he permitted the company to use his lands for the procurement of its water supply. It denies that Ide bought the tract for the company, or with any reference to the future location of its plant, as to which another site was then already determined upon; it denies that Ide was ever complainant's alter ego, and avers that the president, vice president, and mill superintendent were active in its control, and that all matters of importance were...