State v. Mayor, Etc., of City of Neosho.

• Decision Date: 30 March 1907
• Parties: STATE ex rel. SMITH v. MAYOR, ETC., OF CITY OF NEOSHO et al.
• Court: Missouri Supreme Court

101 S.W. 99

203 Mo. 40

STATE ex rel. SMITH v. MAYOR, ETC., OF CITY OF NEOSHO et al.

Supreme Court of Missouri.

March 30, 1907.

MUNICIPAL CORPORATIONS — INDEBTEDNESS — CONSTITUTIONAL LIMITATIONS.

A city purchased the waterworks of a company supplying it and its inhabitants with water, and paid therefor a specified sum in cash, the proceeds of bonds sold by it, and agreed to pay an additional sum in 24 equal semiannual installments, secured by "revenues arising from water service to private consumers." Held, that the agreement to pay the additional sum did not create a debt against the city, within Const. art. 10, § 12, limiting municipal indebtedness.

Woodson and Fox, JJ., dissenting.

In Banc. Appeal from Circuit Court, Newton County; Henry C. Pepper, Judge.

Mandamus by the state, on the relation of Henry B. Smith, against the mayor and board of aldermen of the city of Neosho. From a judgment granting insufficient relief, both parties appeal. Reversed and remanded, with directions to enter judgment in favor of relator as prayed.

George Hubbert and Thurman, Wray & Timmonds, for plaintiff. Horace Ruark and John T. Sturgis, for defendants.

LAMM, J.

Relator, Henry B. Smith (here inafter called plaintiff), sued out an alternative writ of mandamus in the circuit court of Newton county against the mayor and board of aldermen of the city of Neosho whereby respondents (hereinafter called defendants), as such officers, were commanded to forthwith issue and deliver, or show cause why they have not issued and delivered warrants in lawful form upon the treasurer of said city, requiring him to pay certain semiannual installments, of $875 each, to said Smith out of a certain fund created by the earnings and revenues of its waterworks, subsequently to 1900, arising from paid water service to private consumers. On issue joined by the reply to the return to said writ, the alternative writ of mandamus was made peremptory, but for a less amount than set forth in the alternative writ. Defendants complain that any relief was granted; i. e., that the relief was too great. Plaintiff complains that more relief was not granted; i. e., that the relief was too small. On cross-appeals, with a joint bill of exceptions, both parties bring the case here for review.

A judgment below was entered on May 5, 1904. It seems that, pending the suit, two of the defendants, to wit, Pickens and Sims, had gone out of office as aldermen, and Ed Rathell and E. E. Carnes had been elected and installed as their successors, and, further, that the term of office of Charles E. Prettyman as mayor had expired, and J. W. Lamson had been elected and inducted into the office of mayor. In view of these official changes, on the motion of plaintiff, and prior to the rendition of judgment, the foregoing newly elected and qualified officers were substituted as defendants in place of their said predecessors. Neosho is a city of the fourth class. In the region around about that historical town is a spring called the "Clark spring," or "Big spring." It may be inferred, from certain narrations in an ordinance (presently to be considered), that one Clark owned this spring and held a permit to lay pipes in one or more streets of Neosho to furnish water to its inhabitants therefrom. Be that one way or the other, there is another spring, known locally as the "Elm spring," some 5½ miles from the city; and in September, 1890, one Saleno, a resident of Bay City, Mich., was granted a franchise to furnish water to Neosho from the Elm spring, through wooden pipes, called "improved Wykoff pipes" and a plan known as "gravity pressure." The Saleno franchise and contract are set forth in an ordinance known as "No. 113."

The caption of that ordinance is as follows: "Ordinance No. 113. An ordinance providing for a supply of water to the city of Neosho, Missouri, authorizing S. V. Saleno to construct and maintain and operate waterworks, contracting with him for a supply of water for public use and giving said city an opportunity to purchase said works." By section 1 of the ordinance there was "given and guarantied" to said Saleno and his assigns, for 20 years from the date of the adoption of the ordinance, the exclusive right and privilege of supplying the city of Neosho and its inhabitants with water. By section 2 Saleno and his assigns were authorized to establish, construct, maintain, and operate waterworks in the city of Neosho, to receive, take, store, purify, conduct, and distribute water through the city, and construct and maintain mains and pipes through the streets, alleys, lanes, public grounds, and across streams and bridges in said city, and to maintain engines and other appliances necessary for the conduct and carrying on of such works, etc. Section 3 provides that the board of aldermen would accept a named source of water supply as sufficient in quality, quantity, and pressure, when furnished through a 10-inch pipe up to the corporate limits. This section further sets forth the required pressure, the character of pipe to be used, and directs where one main should be laid. It specifies the internal diameter of pipes, and provides for additional pipes as the board of aldermen from time to time direct, subject to the condition that one fire hydrant should be ordered for every 400 feet of additional pipe. Section 4 provides for the character of fire hydrants and sets forth that for the first 5 miles of pipe laid there should be 50 hydrants erected at places designated by the board of aldermen. Section 5 provides that the city should pay Saleno and his assigns an annual rental of $2,000 for said 50 hydrants, and for all hydrants in excess of 50 an annual rental of $30 each, payments to be made semiannually on the 1st days of January and July each year, and to commence when said waterworks be completed and accepted by the board of aldermen, and that said payments continue for the full term of 20 years, unless the city in the meantime should become the owner of the works. Section 6 provides that Saleno and his assigns might mortgage said franchise, rentals, and plant, and in such case a provision is made for the city to pay the interest on the bonded indebtedness out of said hydrant rental. Section 7 sets forth what taxes were to be levied to carry out the ordinance purpose, and out of what funds the hydrant rental and the interest on such mortgage should be paid. Section 8 provides for installing water meters and sets forth in detail the meter rates to be charged for sundry sorts of water service.

The ordinance continues at great length, through 13 more sections, to say that the city should pass an ordinance protecting the source of water supply from pollution and the waterworks property from injury; for the free use of water from hydrants to extinguish fires and to flush gutters and sewers for sanitary purposes; for four free public watering places for domestic animals, and the free use of water for public schools and offices occupied for city purposes; for a test and acceptance of the works; for an option to purchase in one year after the completion of the works, or in any year thereafter, on an appraisement; that if the city did not purchase within the first 20 years, then the franchise should be extended for another term of 20 years with the same right of purchase as before; that the works should be completed by June, 1891; that the ordinance should become a binding contract on Saleno's acceptance of it; that the willful and malicious injury of any of the fixtures or other property pertaining to said waterworks should be a misdemeanor; that Saleno might shut off the water temporarily for purposes of necessary repair; that the rights granted to Saleno were only such as the city now possessed or might hereafter possess, but the city was not bound to acquire rights for the use of Saleno, or pay any damages for property used or taken for the construction or maintenance of the plant. The right was further reserved to the board of aldermen to rescind and revoke the ordinance if the works were not completed in the time and manner prescribed; and, if Saleno or his assigns without reasonable cause failed to comply with the provisions of the ordinance, then a plan for the annulment of the contract by a suit in a court of competent jurisdiction was provided. Saleno was to give bond for $2,000 that he would comply with the contract. Finally, all ordinances and parts of ordinances inconsistent were repealed, and it was further provided that the right of Clark to deliver water to citizens from the Clark spring, or Big spring, was excepted from the Saleno grant, and Saleno's exclusive privilege was diminished thereby; but it was agreed that Clark would not be permitted to repair or extend his pipes or increase his capacity in any way, or extend his pipes through streets, or change their present location after the passage and approval of Ordinance No. 113.

Saleno built and put in operation the waterworks system contemplated by the foregoing ordinance, and at a time not disclosed by the record, but presumably in 1891, completed the same, and the city accepted the works, and Saleno commenced furnishing water under his contract. Presently Saleno, plaintiff, and divers others organized a corporation with $50,000 capital, 50 per cent. paid up, under the style and designation of the "Neosho City Water Company," and this corporation took over Saleno's water franchise and water plant and all his contractual rights under Ordinance 113, and thenceforward stood in his shoes. At a certain time, not disclosed, additional pipe was laid and additional fire hydrants were erected, as provided by said ordinance, until the total number of fire hydrants under rental by the city was 85, and the annual rental was $3,050. This rental, under the ordinance scheme, as said, was to be paid semiannually out of the city's revenues and collected by taxation. At a certain time thereafter a squabble arose,...