State v. Mountain Spring Co.

• Decision Date: 03 December 1909
• Parties: STATE ex rel. CITY OF SOUTH BEND v. MOUNTAIN SPRING CO.
• Court: Washington Supreme Court

105 P. 243

56 Wash. 176

STATE ex rel. CITY OF SOUTH BEND v. MOUNTAIN SPRING CO.

Supreme Court of Washington

December 3, 1909

Department 2. Appeal from Superior Court, Pacific County; A. W. Frater Judge.

Application for mandamus by the State, on the relation of the City of South Bend, against the Mountain Spring Company to compel it to supply water as required by its franchise. From a judgment in favor of relator, the company appeals. Affirmed.

Shepard & Flett, for appellant.

Chas. E. Miller, Welsh & Welsh, and John I. O Phelan, for respondent.

DUNBAR, J.

This is an appeal from a judgment for final writ of mandate entered by the superior court of Pacific county. The action was first brought in the name of the city as plaintiff, but by later stipulation the state was made plaintiff. Stated as briefly as possible, the amended complaint sets forth the granting of a franchise for constructing and operating waterworks in the city of South Bend, to the appellant, or rather to the South Bend Water Company, to whose rights the appellant succeeded and it was authorized to build, operate, and maintain waterworks in the city under such provisions as are generally incorporated in franchises of this character. Among other things, it was required that the waterworks should be so constructed that the company would be able to furnish and maintain to the city and its inhabitants an adequate supply of pure, wholesome water for domestic, sanitary, and manufacturing purposes, and should be able to furnish for fire protection a certain amount, etc. It was also provided that there should be 25 hydrants at stated locations, and that the number of hydrants might be increased. Section 10 of the ordinance stated that the city agreed to use said hydrants at a rental of $7.50 per hydrant per month, to be paid out of the general fund, and a sufficient tax should be levied and collected annually to make the payments for hydrants rented, which tax should be irrepealable during the franchise. There were other provisions in relation to the right of the city to buy the waterworks under certain conditions and at certain times, and a provision requiring the grantee to change the then present source of supply when it became impure or inadequate. The complaint, in short, charged that the defendant had violated its franchise duty, and had neglected to furnish an adequate supply of water. The amended answer admitted the formal allegations of the amended complaint, assignment of franchise to defendant, and its operation and ownership of the plant and denied all of the substantial charges of failure to give the required service, excepting that for brief periods and sundry times, owing to accident and other causes not due to its fault, there had been interruptions in its mains and stoppages in its supply, but alleged that they had been repaired and restored as rapidly as possible, admitting that a few of the residences had been placed at such an elevation that it was not possible to convey water to them.

For a separate affirmative defense, the defendant pleaded 'That, in July and August, 1891, negotiations were had with a view to the construction of a system of waterworks for the city, which was then of about 1,000 population. That it was agreed that the city should grant the franchise for 30 years, and the South Bend Water Company should install and maintain 50 hydrants for fire protection, at the monthly rental of $7.50 each, and an ordinance to that effect was passed. That the terms of this contract were mutually interdependent and indivisible. That, to obtain the necessary capital and comply with the terms of the ordinance and afford proper security to investors, it was necessary that the company should have some certainty of a substantial income whereby it could meet its expenses of operation and fixed charges. That at that time the assessed valuation of the property of the city was $2,368,000, and there was no outstanding debt, except a bonded debt of $60,000. That, in reliance on this franchise and the hydrant rental, the company raised the necessary capital by loan and constructed this system. That as originally built it was operated by steam power; the works being partly constructed in 1891-92. That disputes arose between the company and the city as to the company complying with all the terms of the ordinance, litigation ensued, and compromise was agreed to, whereby, as a substitute for ordinance No. 100, the ordinance just above referred to, a new ordinance was passed, in similar terms, except that, instead of 50 hydrants, the company was to install and erceive rent at the same rate for only 25 hydrants, with privilege on the part of the city to order an extension of mains, etc. That the city, in order to pay for the hydrant rental, was to raise money by general taxation. On April 3, 1893, ordinance No. 118 was passed by the city council as a substitute for said ordinance No. 100, and the company proceeded with the construction of its system, and installed the 25 hydrants by July 7, 1893, and supplied water through its said system to the inhabitants of the city, and provided fire protection by means of hydrants. On July 17, 1893, and until March 1, 1894, the city issued and delivered its warrants for hydrant rental; but none of them has ever been paid. In consequence of the general collapse of credit and decline of business throughout this and other states in 1893 and 1894, the city's business and population were checked, and in 1894, 1895, and 1896, the actual volume of business and population of the city progressively declined, and the assessed valuation progressively fell, while the city's debt rapidly grew. The assessment of June, 1892, was $1,908,000. In October, 1893, it was $520,000. The general city debt in excess of the bonds in October, 1893, was $21,500,...