Stein v. Bienville Water Supply Co

• Decision Date: 11 May 1891
• Parties: STEIN v. BIENVILLE WATER SUPPLY CO
• Court: U.S. Supreme Court

141 U.S. 67

11 S.Ct. 892

35 L.Ed. 622

STEIN v. BIENVILLE WATER SUPPLY CO.

May 11, 1891.

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Mr. W. Hallett Phillips for appellant.

Mr. T. A. Hamilton and Mr. D. P. Bestor for appellee.

Mr. Justice HARLAN delivered the opinion of the court.

This case presents a question under the clause of the constitution of the United States relating to the impairment by state legislation of the obligation of contracts.

The appellant, who was the plaintiff below, claims that his testator, Albert Stein, deceased, acquired by valid contract, and to the exclusion of all other persons or corporations, the right and privilege by a system of public works of supplying the city of Mobile and its inhabitants with water, from whatever stream or river drawn, until that city should redeem and purchase the water-works constructed and maintained by the testator in accordance with the terms of that contract; and that the obligation of such contract was impaired by an act of the legislature of Alabama, approved February 19, 1883, incorporating the Bienville Water Supply Company. Acts Ala. 1882-83, p. 451. In this view the court below did not concur, and it dismissed the bill for want of equity. 34 Feb. Rep. 145.

It will conduce to a clear understanding of the issue between the present parties if we trace the history of the ues tion of water supply for Mobile and its inhabitants, as disclosed in the legislation of Alabama and in the action upon that subject, from time to time, of the constituted authorities of that city. This being done, the inquiry as to whether the above act of 1883 impairs the obligation of the contract that Stein had with the city can be solved without extended discussion.

The first act to which attention is called is that of December 20, 1820, incorporating the Mobile Aqueduct Company. Its preamble recites that 'it has been represented that it would be of singular advantage to the health and commerce of the city of Mobile to be supplied with water from some of the running streams in its vicinity, which would be attended with too much labor and expense to be effected by laying a tax for the purpose,' and that 'it has also been represented that certain individuals have agreed to associate themselves together for the purpose of conducting a supply of water from a creek called 'Three-Mile Creek,' otherwise 'Bayou Chatogue,' for the use of the citizens and other persons residing in the city of Mobile.' In consequence of these representations, certain named persons were constituted a corporation under the name of the 'Mobile Aqueduct Company,' with authority to establish a channel or canal large enough to contain and conduct water in quantities sufficient to supply the citizens and other persons of Mobile. The act provided 'That the said corporation and their successors shall have and enjoy the exclusive right and privilege of conducting and bringing water for the supply of said city for the space of forty years: provided, the said corporation or their successors shall, before the expiration of three years from the passage of this act, cause to be conducted the water, from the said bayou or creek, to the said city of Mobile, in the manner bereinbefore proposed: and provided, also, that, after the expiration of the said term of years, the said water-works shall become the property of the said city, and shall be for the free use of the inhabitants thereof forever.' Acts Ala. 1820, p. 72.

Nothing was done by this company; and by an act approved December 24, 1824, amendatory of the charter of Mobile, the act of December 20, 1820, was declared null and void, and all the rights, privileges, and powers granted by it were transferred to and vested in that city for the use and benefit of its inhabitants. Acts Ala. 1824-25, p. 68.

On the 1st day of December, 1836, an agreement in writing was entered into between the city and one Hitchcock, whereby the former granted and leased to the latter, his executors and assigns, for the term of 20 years, the entire use, control, management, rents, profits, and issues of the 'Mobile City Water-Works,' embracing the ground at Spring Hill, where the fountain was situated, and the ground along which the pipes passed from the fountain to the city, together with the use of all the wooden and iron pipes and logs then laid down, as well as all the advantages that had accrued to the city from, by, or under the above act of December 20, 1820, and from all ordinances or resolutions passed by the city relating to said city water-works. This grant and lease was in consideration of the payment of certain sums, evidenced by Hitchcock's notes, and upon the condition, among others, that he would, within the space of two years from the date of the agreement, 'put the said water-works in good and sufficient repair, so as to continue during the time hereby granted, and will also keep up the said water-works in good order as they now are until they shall be so placed in good order and repair, so that the city of Mobile, and the inhabitants thereof, may at all times be supplied with such quantity of good, wholesome water as may be procured through the said aqueduct;' such water-works to be surrendered to the city in good order and condition at the end of the 20 years, Hitchcock being paid what they actually cost him during that time. That contract also provided that Hitchcock, his executors, administrators, and assigns, should, during said term of 20 years, 'have the exclusive privilege of furnishing to the citizens and inhabitants of the city of Mobile water from the aqueduct or water-works aforesaid, at a sum or price which shall at no time be less' than certain named rates; and that he shall have 'the power and authority to make such alterations and repairs upon the said works, and to erect such new work, and in such manner, as he may deem necessary and proper, and may at will change the fountain head, and conduct the water from any part of 'Three-Mile Creek,' so called, so that the same be good and wholesome; he, the said Henry Hitchcock, procuring, at his cost, the necessary ground for the reservoir or reservoirs, and that through which the pipes shall pass. And the said mayor and aldermen of Mobile, for themselves and their successors in office, hereby further covenant and agree that they will, at the expiration of the said term of twenty years, (he, the said Henry Hitchcock, his executors, administrators, or assigns, delivering up the said 'water-works' and appurtenances in good order and repair,) pay to him or them the actual cost and expenses which he or they shall have laid out and expended, and which may be put upon the said works by him or them, or any of them, either by reason of repairs, or addition to the present works, as by alterations or improvements made upon the said water-works during the said term of twenty years above stated.'

Subsequently, December 25, 1837, an act was passed incorporating the Mobile Aqueduct Company, to continue until December 1, 1856, and until it should have been 'purchased out' by the city of Mobile, during which period it was to have and enjoy all the rights, privileges, and immunities conferred by the above act of December 20, 1820, except as modified by the act of December 25, 1837, the former act being revived and declared to be in force during the continuance of the latter one. The fifth section of the act of December 25, 1837, recognized and confirmed the contract between the city and Hitchcock, and provided that upon its assignment to the new company (which he was authorized to make) the same was to inure to its benefit, and should be subject to all the covenants therein contained to be performed by Hitchcock. That act further provided that the new company 'shall be permitted the use of the streets in the city of Mobile, free of charge, for the purpose of laying down pipes for the conveyance of the water;' also 'that so soon after the 1st day of December, 1856, as the said corporation of Mobile shall pay to the said company the cost of the said work, in conformity with their contract, before referred to, with the said Henry Hitchcock, then this act shall cease to operate, and not before: provided, that the said company shall have power to collect its debts and wind up its affairs.' Acts Ala. 1837, p. 76.

Shortly after the passage of the act of December 25, 1837, the water-works property again passed into the possession of the city of Mobile, and the building of the system contemplated by that act was abandoned.

On the 26th day of December, 1840, the city of Mobile and Albert Stein, the testator of the plaintiff, entered into a written agreement, whereby the city granted to him, his heirs, executors, administrators, and assigns, the 'sole privilege of supplying the city of Mobile with water from the Three-Mile creek for twenty years from the date of this agreement, as well as all the advantages and benefits which accrue to the said mayor, aldermen, and common council from, by, or under an act of the legislature of the state of Alabama, entitled 'An act to incorporate an aqueduct company in the city of Mobile,' passed December 20, 1820, and all ordinances and resolutions passed by the said mayor and aldermen of the city of Mobile, under and by virtue of the said act, or by the act of incorporation of the said city of Mobile, and the several acts amendatory thereto, which in any way or manner relate to the said 'City Water-Works,' or the righ to supply said city with water, as well as all the benefits and advantages which accrue to the said mayor, aldermen, and common council, or the mayor and aldermen of the city of Mobile, from, by, or under an act of the legislature of the state of Alabama, entitled 'An act to incorporate the Mobile Aqueduct Company,' passed December 25, 1837, to have and to hold the above mentioned and described privileges, together with all and singular the appurtenances unto the same belonging, or in any wise appertaining, unto...