Risley v. City of Utica

• Decision Date: 07 June 1910
• Citation: 179 F. 875
• Parties: RISLEY et al. v. CITY OF UTICA et al. CITY OF UTICA v. CONSOLIDATED WATER CO. OF UTICA et al.
• Court: U.S. District Court — Northern District of New York

179 F. 875

RISLEY et al. v. CITY OF UTICA et al.

CITY OF UTICA v. CONSOLIDATED WATER CO. OF UTICA et al.

United States Circuit Court, N.D. New York.

June 7, 1910

[Copyrighted Material Omitted]

Risley & Love, for complainants in original suit.

Thomas S. Jones and Charles E. Snyder (William H. Corbin, of counsel), for Consolidated Water Co.

George C. Morehouse, for City of Utica.

RAY District Judge.

All the parties of these suits are citizens of the state of New York and this court has and can maintain jurisdiction, if at all under Act Cong. March 3, 1875, c. 137, Sec. 1, 18 Stat. 470 (U.S. Comp. St. 1901, p. 508), which provides:

'The Circuit Courts of the United States shall have original cognizance, concurrent with the courts of the several states, of all suits of a civil nature, at common law or in equity, where the matter in dispute exceeds, exclusive of interest and costs, the sum or value of two thousand dollars, and arises under the Constitution or laws of the United States * * * or in which there shall be a controversy between citizens of different states.'

It is contended that the amount in controversy does exceed the sum of $2,000 exclusive of interest and costs, and that the suit arises under the Constitution of the United States and presents a federal question or questions, in that the rights of complainants guaranteed by the fourteenth amendment have been and are being violated. Said amendment provides: 'Nor shall any state deprive any person of life, liberty or property without due process of law, nor deny to any person within its jurisdiction the equal protection of the laws.'

The contention of the complainants is that the complainant parties have been and are being deprived of their property by unjust and unlawful taxation by instrumentalities of the state without due process of law in violation of the constitutional provision referred to.

It must now appear by some evidence that the amount in controversy does exceed the sum of $2,000 exclusive of interest and costs and, also, that the complainants by some act of the state have been and are being deprived of their property, by means of taxation, without due process of law, or this court has no jurisdiction; and when the absence of this fact or these facts appear plainly and conclusively on the complainants' own showing, if they do, it is the duty of the court, on its own motion, even, to dismiss the suit.

The act of Congress provides:

'Sec. 5. That if in any suit commenced in a Circuit Court * * * it shall appear to the satisfaction of said Circuit Court at any time after such suit has been brought or removed thereto that such suit does not really and substantially involve a dispute or controversy properly within the jurisdiction of said Circuit Court, * * * the said Circuit Court shall proceed no further therein but shall dismiss the suit or remand it to the court from which it was removed, as justice may require, and shall make such order as to costs as shall be just.'

There are many cases holding it to be the duty of the court under this statute to dismiss when want of jurisdiction in the Circuit Court appears. It would, it seems to me, be folly to put the parties to the delay and expense of a further hearing when this fact appears on the complainant's own showing. Why a party defendant should be put to his defense when no case of which the court has jurisdiction has been made against him, or when no equity or ground of relief is shown, is a proposition not easily comprehended. Allegations in a bill of complaint are one thing; proof to sustain them is quite another. The allegations of this bill as now framed-- and it is quite different from the one first filed-- have been fully considered. Risley v. City of Utica (C.C.) 173 F. 502.

The city of Utica is one of the cities of the state of New York of the second class existing under the provisions of chapter 18, Laws 1862, and the acts amendatory thereof and supplementary thereto. The common council of said city has the general power 'to establish, make and regulate public wells, aqueducts and reservoirs of water for the convenience of the inhabitants of the city and its protection against fires, and to prevent the unnecessary waste of water. ' The city has no waterworks or reservoirs of its own and depends for its supply of water for domestic and all public uses, including the extinguishing of fire, on the Consolidated Water Company of Utica. That company came into existence in this way: Pursuant to chapter 154, Laws N.Y. 1848, the Utica Waterworks Company was incorporated. The West Canada Waterworks Company was organized in May, 1898. In November, 1899, the defendant company was organized, and thereafter the other companies named sold, assigned, and transferred all their properties and property rights to the Consolidated Company.

I do not find any evidence that these transfers were made with bad motives, or for illegitimate purposes, or for the creation of a monopoly, or to enable said Consolidated Company to impose upon the taxable inhabitants of said city illegal charges or taxation, or to confiscate property. There are no facts proved from which these conclusions or similar ones can legitimately be drawn. So far as appears, it was a business proposition entered into in good faith with the expectation, undoubtedly, that the company would make money or obtain a fair return on the money invested. I find no federal question presented by evidence under this feature of the bill. It is claimed on the one hand, and denied on the other, that the contract hereafter referred to was assigned and transferred to the Consolidated Company by the Utica Waterworks Company, and assumed by it, and that the parties have been acting under it for many years last past. Whether or not it was assigned or capable of being assigned is a local and state, not a federal, question.

By chapter 393, Laws N.Y. 1867, the common council of the city of Utica was expressly authorized and empowered to make a contract with the said Utica Waterworks Company: (1) For a supply of water for the extinguishment of fires in said city; (2) to fix and agree upon the sum to be paid annually therefor; (3) said sum so fixed to be added each year to the tax authorized to be raised by the city charter of the city and collected therewith and by the same power and authority. The act made it obligatory on the company, when such contract was made, to: (1) Furnish water to said city of Utica for the purpose of extinguishing fires; and (2) to lay and extend its pipes and conduits on such streets as the common council should designate; and (3) provide suitable reservoirs to constantly supply said city with sufficient water for the said purpose of extinguishing fires. This act of the Legislature of the state of New York, it will be noted, authorized a contract between the city of Utica by its common council and the Utica Waterworks Company; the Consolidated Company not being in existence at that time. I can discover nothing in this act beyond the power of the state, by its Legislature, to do. Where a state creates municipal corporations, cities and villages, it has the power, clearly, to authorize and empower them to do the things necessary for their welfare and existence; to guard its people against contagious diseases; to lay out and improve streets and avenues for public travel; to prevent crime against person and property; to preserve public and private property from loss or destruction by fire; and to assess and levy and collect taxes to pay the expense of so doing. The Constitution of the state may limit the exercise of these powers by the Legislature; but unless it does the Legislature may go to any reasonable extent in these directions so long as the Constitution of the United States is not violated, as no state may 'deprive any person of life, liberty or property without due process of law, nor deny to any person within its jurisdiction the equal protection of the laws. ' Should a state assume to deprive one or more persons of their property, under the guise of taxation or otherwise without due process of law, it would violate the mandates of the federal Constitution, and one complaining of the acts and injured thereby would have the right to seek and obtain redress in the courts, and, in so doing, a federal question would be presented, and the federal courts would have jurisdiction of the case.

The state, having created the city of Utica, had the right to authorize it to protect the property of its citizens against loss or destruction by fire for the common good and welfare and to tax the taxable property of the residents of the city for the purpose of defraying the expense of so doing. The act of the Legislature of the state of New York referred to does not say in terms that the taxing power conferred shall be exercised by due process of law; but it does not authorize its exercise by illegal or arbitrary methods, or without due process of law. It does not authorize the taxation of one person and the exemption of others, similarly situated, for the purposes mentioned, but authorizes the taxation of all. It does not limit the supplying of water for the extinguishing of fires to one section of the city, or to any one or more classes of property, but is general in application and includes all fires and all property within the city. The water company is to lay and extend its pipes and conduits in such streets as the common council shall designate, but this was done to give the city control over its streets and avenues, the tearing up, etc., of streets and not for the purpose of authorizing it, by its common council, to obtain a supply of water for one street and the extinguishment of fires on that street and deny it to others...