Reed v. City of Anoka
| Decision Date | 24 January 1902 |
| Docket Number | 12,822 - (161) |
| Citation | 88 N.W. 981,85 Minn. 294 |
| Parties | EDWARD L. REED and Others v. CITY OF ANOKA and Others |
| Court | Minnesota Supreme Court |
Appeal by plaintiffs from an order of the district court for Hennepin county, Harrison, J., denying a motion for a new trial. Affirmed.
Powers of Defendant City -- Contract with Individual.
The charter of the city of Anoka confers upon the municipality in substance: (a) Power to make and establish public pumps wells, cisterns, and hydrants, and to provide for and control the erection of waterworks for the supply of water for the city and its inhabitants; (b) power to provide for lighting the city with electricity, gas, or other means, and to control the erection of any works for that purpose, and to grant to any corporation or person the right to occupy its streets for that purpose. Held, that such provisions of the charter invest the municipality with power and authority to enter into contracts with private individuals for the purposes stated.
Rules Applicable to Such Contracts.
Entering into such contracts and granting a franchise to individuals do not involve an exercise on the part of the municipality of its legislative or governmental functions, as respects the rates and charges to be paid the grantees for a performance of the contracts, or otherwise, but only its proprietary or business powers; and the rules and principles of law applicable to contracts and transactions between individuals apply thereto.
Discretion of Local Authorities.
The authority given municipalities to enter into contracts of this character confers upon the local authorities large discretionary powers, with the exercise of which courts will not interfere unless clearly abused, unless contracts made by them are unreasonable, inequitable, and unfair.
Contract for 31 Years.
Contracts of the nature of those in question in this action are not, merely from the fact that they cover a period of thirty-one years, and definitely and finally fix the rates and charges to be paid the grantees for the full period, prima facie void, as unreasonable and unfair. They are prima facie valid, and, in the absence of a showing of unreasonableness, must be upheld.
Reasonableness of Contract -- Presumption.
The questions whether the necessities of a municipality justify a contract for so long a period of time, and the fairness and reasonableness of the terms thereof, are addressed to the sound judgment of the municipal officers; and, as such officers are presumed to act within the scope of their authority, and for the best interests of the municipality they represent, the burden to impeach the contract is upon the person who calls it in question.
Flynn v. Little Falls Electric & Water Co. Distinguished.
Flynn v. Little Falls E. & W. Co., 74 Minn. 180, distinguished.
Russell, Cray & Jamison, for appellants.
Hale & Montgomery, for respondents.
This action was brought by plaintiffs, as freeholders and taxpayers of the city of Anoka, in their own behalf and in behalf of all other taxpayers of the city, against the city and its officers and the respondent Anoka Waterworks, Electric Light & Power Company, for the cancellation of certain contracts between the city and respondent, and praying that defendants, and each of them, be forever enjoined and restrained from further performance or compliance therewith. Defendant electric light company appeared and answered, denying some of the material allegations of the complaint, and setting out fully the transactions out of which the contracts in question arose. When the cause came on for trial before the court below without a jury, defendant admitted the allegations of the complaint to the effect that plaintiffs are freeholders and taxpayers, and thereupon plaintiffs rested their case without offering any evidence in support of the other allegations of their complaint put in issue by the answer, whereupon, upon defendant's motion, the court dismissed the action. Plaintiffs subsequently moved for a new trial, and they appealed from an order denying it.
The facts, briefly stated, are as follows: The city of Anoka is a municipal corporation organized and created by Sp. Laws 1889, c. 9. Subsequent to its incorporation, and in the year 1889, the city entered into two certain contracts with the firm of Sykes, Brown & Chase, by which those persons contracted and agreed to construct and equip within the city a system of waterworks for the supply of water to its inhabitants and for the use of the city, and also to establish and equip an electric light plant for the use of the city and its inhabitants. Two contracts were made, -- one with reference to the waterworks, and one with reference to the electric light plant. Sykes, Brown & Chase assigned the contracts and all rights and privileges thereunder to the defendant waterworks and electric light company, which subsequently fully complied therewith by erecting and constructing both plants; and it has since continued to operate them. Both are long-term contracts, extending for a period of thirty-one years; and the plants were fully completed and put into operation, as required by their terms, on or about January 9, 1890. The waterworks contract, which is made up of certain ordinances duly enacted by the city council and the acceptance thereof by Sykes, Brown & Chase, provides, among other things, for laying water mains within specified limits of the city, placing certain hydrants therein, the use of the streets and alleys of the city being surrendered to the grantees for that purpose, for placing certain hydrants therein, and requiring the grantees to erect a standpipe of certain dimensions, and to provide machinery, pumps, appurtenances, and attachments with pumping capacity of one million seven hundred thousand gallons per day; in consideration of all of which the city agrees to pay the grantees the sum of $64 per year for each hydrant for the full term of the contract. Certain restrictions and limitations are imposed by the ordinances with respect to the charges to be made by the grantees to private persons for water furnished them. The contract as to the electric light plant contains substantially, in a general way, the same provisions, except as to the amount of compensation to be paid the grantees, and no limitations are imposed as to rates to be charged private consumers.
The authority under which the city acted in entering into the contracts is found in the provisions of its charter, which, among other things, confer upon the municipality, in substance: (a) Power to make and establish public pumps, wells, cisterns, and hydrants, and to provide for and control the erection of waterworks for the supply of water for the city and its inhabitants; (b) power to provide for lighting the city with electricity, gas, or other means, and to control the erection of any works for that purpose, and to grant to any corporation or person the right to occupy its streets for that purpose. There can be no doubt but that these charter provisions confer upon the municipality authority to enter into contracts with individuals for the purpose of providing itself and its inhabitants with a supply of water, and for the purpose of lighting the city. Authorities sustaining the proposition, under similar charter provisions, are numerous: Andrews v. National Foundry & Pipe Works, 10 C.C.A. 60, 61 F. 782; Los Angeles v. Los Angeles City Water Co., 177 U.S. 558, 88 F. 720; City v. Newport, 84 Ky. 166; City v. Indianapolis, 66 Ind. 396.
We do not understand appellants to contend that the charter provisions are insufficient to authorize contracts for the purposes stated. What they do contend is that the contracts are void on their face because and for the reason that they cover a term of thirty-one years, and definitely and finally fix and determine the rates of compensation to be paid the grantees for the full period, and thus, in effect, barter and contract away legislative functions of the municipality; it being claimed in this behalf that the right to fix rates and charges to be paid for water and light furnished by the grantees under the contracts is purely...
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