Selma Water Co. v. City of Selma

• Decision Date: 02 April 1907
• Docket Number: 254.
• Citation: 154 F. 138
• Parties: SELMA WATER CO. v. CITY OF SELMA.
• Court: U.S. District Court — Southern District of Alabama

154 F. 138

SELMA WATER CO. v. CITY OF SELMA.

No. 254.

United States Circuit Court, S.D. Alabama, Northern Division.

April 2, 1907

The bill avers that on July 12, 1890, the municipality of Selma and the complainant entered into a contract, by which said municipality granted to the complainant the exclusive right and franchise to construct, maintain, and operate waterworks in said city of Selma for public and private supply of water therein for the period of 25 years from that time, and it avers that the complainant did construct and has maintained and operated said waterworks since the execution of said contract, and now has and holds as a vested right under said contract the exclusive right and franchise to construct maintain, and operate waterworks in said Selma for public and private supply of water therein, and further avers that by said grant said Selma did exclude itself during said 25 years from constructing, maintaining, and operating a waterworks for the purpose aforesaid in said city of Selma, on certain considerations and conditions set out in said contract unnecessary to be mentioned here, except that it was agreed by complainant that it would sell said waterworks to said municipality of Selma if said municipality should so elect after the expiration of five years from the date of the contract, and, if the parties could not agree as to the price to be paid to complainant, then said works might be purchased by defendant at an appraised value to be determined by appraisers as in the contract provided.

The bill avers that on February 26, 1906, the municipal authorities of Selma adopted an ordinance ordering an election to be held on April 2, 1906, for the purpose of allowing the qualified voters of Selma to vote upon the question whether or not bonds of the said city of Selma to the amount of $150,000 should be issued by said city for the purpose of purchasing or constructing a waterworks plant, and that the result of said election was in favor of the issuance of said bonds.

The bill further avers that complainant's exclusive right and franchises under said contract do not expire until the 12th of July, 1915, and that until that time said Selma has no right to construct, maintain, or operate waterworks, and no right to issue bonds to build or construct waterworks for the public and private supply of water in said city.

The bill further avers that on November 5, 1906, Selma passed an ordinance that the finance committee, with the mayor added be authorized to take such further action as they may deem best for the purchase of the water plant, or for building and equipping a water plant.

The bill also avers that the city of Selma had the right to purchase complainant's waterworks, and that on December 7, 1906, it notified the complainant of its desire to purchase the same under its right to do so as provided by the contract.

The bill avers that, if Selma is permitted to issue said bonds and construct waterworks and furnish said city and inhabitants with water, the complainant's franchise will be greatly and seriously impaired, and it prays that the defendant be enjoined from assuming to abrogate and take away the franchises and contract rights of complainant.

Mallory & Mallory, for complainant.

Pettus Jeffries & Pettus, for defendant.

TOULMIN District Judge (after stating the facts).

The gravamen of the complaint is that the complainant has contract franchises and rights which the defendant has violated, and which will be greatly and seriously impaired thereby.

The motion for a preliminary injunction is submitted on the bill and answer and affidavits in connection therewith. If the contract rights of the complainant are clearly established, and the violation of them is apparent, an injunction may be granted. It is not requisite that a breach of covenant against which preventive relief is sought shall have been actually committed. It is sufficient ground of interference that defendant insists upon its right to do the act in question; but equity will not assume that the defendant intends to violate its covenant, and will not interfere unless it is manifest that a breach is intended. 2 High on Injunctions, p. 744, Sec. 1137. 'An injunction pendente lite ought not to be issued except in clear cases of right. ' Amelia Milling Co. v. Tenn. C.I. & R.R. co. (C.C.) 123 F. 811.

It is admitted by defendant in its answer that the complainant, as averred in its bill, has the exclusive right and franchise to construct, maintain, and operate waterworks for public and private supply of water in the city of Selma until the expiration of said contract, to wit, the 12th of July, 1915. The contract rights of the complainant being established, the first question to be considered is: Is it clear or apparent that there has been a violation of these rights, or that such violation is intended, by the defendant? The prayer of the bill is that the defendant be enjoined from assuming to abrogate and take away the contract rights of the complainant. The acts alleged as showing such assumption on the part of the defendant are the adoption of the ordinance of February 26, 1906, ordering an election by the voters of Selma on the question whether or not bonds of the city should be issued for the purpose of purchasing or constructing a waterworks plant, declaring the result of such election, and passing the ordinance of November 5, 1906, authorizing the finance committee and the mayor to take such further action as they may deem best for the purchase of a water plant or for building and equipping a water plant.

It is conceded by averments, in the bill and in argument of counsel, that the defendant had the right under the contract to purchase the waterworks of complainant, and that on December 7, 1906, said Selma, through its mayor, notified the complainant of its desire to purchase the same, as provided for in said contract, and it appears from the record that since that time parties have proceeded to...