Scott v. City of La Porte

• Decision Date: 08 October 1903
• Citation: 162 Ind. 34,68 N.E. 278
• Parties: SCOTT et al. v. CITY OF LA PORTE et al.
• Court: Indiana Supreme Court

162 Ind. 34

68 N.E. 278

SCOTT et al.

v.CITY OF LA PORTE et al.^*

Supreme Court of Indiana.

Oct. 8, 1903.

Appeal from Circuit Court, La Porte County; A. C. Capron, Special Judge.

Suit by Emmet H. Scott and others against the city of La Porte and others. A decree was entered refusing an injunction, and from an order overruling a motion for a new trial plaintiffs appeal. Reversed.

Daniel Noyes and W. B. Biddle, for appellants. E. D. Saulsbury, W. C. Ransburg, Weir, Weir & Darrow, C. H. Truesdale, M. R. Sutherland, and H. S. Oakley, for appellees.

GILLETT, J.

Appellants, as taxpayers of the city of La Porte, commenced this action to enjoin the taking of certain steps by said city looking to the procuring of an additional water supply for its purposes and for the use of its inhabitants. Upon a final hearing an injunction was refused. A motion for a new trial was filed, assigning as grounds therefor that the decision of said court was not sustained by sufficient evidence and was contrary to law. This motion was overruled, and an exception duly reserved by appellants, and said ruling is assigned as error.

Answering a preliminary contention of appellee's counsel, where a copy of an item of documentary evidence has been once set out in the bill of exceptions, it is sufficient, if a copy of the document is again read in evidence in another connection, to describe such item by words of general description, and show by an appropriate cross-reference where it is exhibited in the bill. Miller v. Coulter, 156 Ind. 290, 59 N. E. 853;Henry v. Thomas, 118 Ind. 23, 20 N. E. 519;McFadden v. Wilson, 96 Ind. 253;Colee v. State, 75 Ind. 511;Smith v. Lisher, 23 Ind. 500. There is no question involved as to the opinion of the reporter that the instrument before copied and the one afterwards referred to are identical. The effective certification as to what the evidence was is that of the judge. Hauger v. Benua, 153 Ind. 642, 53 N. E. 942. If the clerk may pursue a like course in the preparation of his transcript, as our cases assert, much more ought it to be held that the trial judge may refer in a bill of exceptions to a prior portion of such bill. As the original bill of exceptions is before us, thus preserving the original paging, there can be no element of uncertainty occasioned by the practice pursued in this instance. The material facts in this case are substantially as follows: The city of La Porte is incorporated under the general law for the incorporation of cities, and it had a population of a little less than 8,000 prior to the year 1900. In 1898, and for many years theretofore, the city had owned a waterworks system, two lakes being the source of supply. In August, 1898, the legal voters of said city had submitted to them a proposition to seek a water supply elsewhere, and the proposition was carried. Plans and specifications were thereupon prepared, calling for the building of a plant whereby the necessary water could be pumped and transported from a contemplated new source of supply to a reservoir that the city was to build adjacent to the pumping station of said city. On July 24, 1899, the city, pursuant to advertisement, received bids for such plant, the lowest bid being $97,850, submitted by W. H. Wheeler. The valuation of the property in the city for taxation in the year 1899 was $3,972,169. Its total indebtedness at that time (not counting streets assessment warrants, which would afterwards be retired by the sale of bonds, which would be liens against the abutting property) was $45,359.40. On each $100 of valuation the city tax levy for the year 1899 was $1.05, 20 cents of which levy was designated as on account of “new waterworks fund,” and the balance was levied for other purposes. The bid aforesaid was brought to the attention of the common council through the report of a committee, and was made subject to acceptance “up to and until Tuesday, July 25, 1899, and not afterwards.” The committee recommended that the common council “accept the proposition of W. H. Wheeler, of Beloit, Wisconsin, asking for a franchise,” and that certain designated members of said council be appointed as a special committee “to draft a franchise in accordance with this report to a company to be named ‘The La Porte Water Supply Company,’ to construct a waterworks plant in accordance with the plans and specifications and profiles on file in the office of the city clerk.” A resolution was thereupon adopted, appointing a special committee “to draft a franchise in favor of W. H. Wheeler and Company to construct a water supply plant” in accordance with such plans and specifications. August 5, 1899, articles of association were filed for the organization under the laws of Indiana of a corporation to be known as the “La Porte Water Supply Company.” The capital stock of the corporation was fixed at $75,000, divided into 750 shares of the par value of $100 each. The incorporators were W. H. Wheeler, E. P. Wheeler, and George M. Allen, whose subscriptions to said capital stock aggregated $40,000. It may be stated in this connection that $5,000 of said stock was not subscribed at any time. On August 7, 1899, said common council adopted an ordinance entitled “An ordinance granting to the La Porte Water Supply Company the right to construct and maintain a system of waterworks for the purpose of furnishing water to the city of La Porte and its inhabitants.” Said ordinance provided that said company should have the right and privilege to erect, maintain, and operate a waterworks system in accordance with said plans and specifications for the period of 21 years from and after the passage of the ordinance. It was further provided therein that the city would purchase of said company at least 30,000,000 gallons of water per month, to be delivered in said proposed reservoir, to be paid for semiannually at the rate of three cents per 1,000 gallons, but the city was not to pay for any water not actually furnished. The ordinance also provided that the city would furnish said company the necessary live steam, delivered at sufficient pressure, to operate the machinery and pumps of said company to their full capacity. Section 5 of said ordinance contains the following provision: “The city of La Porte hereby pledges the income and revenue of its waterworks system for the payment of water rentals accruing hereunder, and in addition it agrees to annually, in due time, manner and season, levy a tax sufficient to amply supplement said income and revenue, so that at all times the said water rentals shall be promptly paid. In the event that the company shall issue bonds, the city of La Porte agrees to pay the rentals herein provided for to the trustees for said bonds, as may be directed by the company.” On August 14, 1899, the common council adopted a resolution providing for the employment of an engineer and assistants to supervise the construction of said waterworks system by said company. On the same date said council provided for the sale of bonds by the city to the amount of $30,000, the proceeds to be used in the purchase from said company of 300 shares of its capital stock, which the mayor and city clerk were authorized to subscribe for. On August 21, 1899, said stockholders, Wheeler, Wheeler, and Allen, signed and delivered to said city a writing, purporting to be a contract between said city and said stockholders, providing, first, that the stock subscription of said city of $30,000 should be paid to a trustee, to be expended on orders given during the construction of said plant, and for that purpose, after said other stockholders had expended a like sum in its construction; and, second, that said other stockholders should deposit their stock in said company with said trustee, and indorse the certificates therefor in blank, and authorize said trustee to deliver said certificates to the clerk of said city upon the payment to said trustee, for the use of said stockholders, within one year thereafter, of the sum of $10,000. On August 28, 1899, said company filed its written acceptance of said ordinance of August 7, 1899. On the same date said Wheeler, Wheeler, and Allen contracted with the company that they would construct said plant for $30,000 cash, 350 shares of the stock of said company, and the mortgage bonds of said company to the amount of $60,000. There was a change made afterwards, by which, in consideration of delays and extras, the contractors were to receive $5,000 additional, payable in the bonds of the company, and $5,000 additional, payable in the stock of said company. The sale of said city bonds and the investment of the proceeds thereof, as provided by said ordinance of August 14th, was reported to the council September 25, 1899. On the next day a bond issue of the company to the amount of $65,000 was authorized by the stockholders and directors thereof, secured by a mortgage on the proposed plant of said company and by an assignment of its contract with the city of La Porte. At the same time the issue of bonds of said company was reported sold by the said Wheeler, Wheeler, and Allen to third parties, the proceeds to be paid to them, the said contractors. The plant was built under the supervision of an engineer employed by the city. On May 2, 1900, a special committee of the council reported that the plant was completed, and on the same date said council accepted a proposition of said Wheeler, Wheeler, and Allen to purchase 398 of their said shares of stock for $9,950. On June 11, 1900, a special committee of the council reported that it had consummated said transaction, and it appears that the remaining two shares of stock that were held by said contractors were turned over by them to certain citizens of La Porte, presumablyfor the benefit of the city. It appears that said water company has never possessed any property other than such property as was vested in it by the transactions with it above recited. The defense...