Superior Water, Light & Power Co. v. City of Superior

• Decision Date: 11 January 1921
• Citation: 181 N.W. 113,174 Wis. 257
• Court: Wisconsin Supreme Court
• Parties: SUPERIOR WATER, LIGHT & POWER CO. v. CITY OF SUPERIOR ET AL.

174 Wis. 257

181 N.W. 113

SUPERIOR WATER, LIGHT & POWER CO.

v.CITY OF SUPERIOR ET AL.

Supreme Court of Wisconsin.

Jan. 11, 1921.

Appeal from Circuit Court, Douglas County; James Wickham, Judge.

Action by the Superior Water, Light & Power Company against the City of Superior and others. From order overruling demurrer to the complaint, defendants appeal. Order reversed, and cause remanded with directions to sustain demurrer.

Action to enjoin the city of Superior and its officers from proceeding under the provisions of sections 1797m1 to 1797m109, Stats., to acquire the waterworks and property of the plaintiff, and compelling the city to compensate the plaintiff for its property according to the provisions of a certain ordinance of the city of Superior granting to the plaintiff a franchise to build, operate and maintain waterworks in said city. From an order overruling a demurrer to the complaint the defendants appealed.

The complaint shows that the Superior Waterworks Company (hereinafter referred to as the water company) was incorporated by chapter 359 of the Private and Local Laws of Wisconsin for the year 1866. By the terms of the act it was provided that said company may, for the purpose of supplying the town of Superior and its neighborhood with pure water, “enter upon any lands, streets, highways, roads, lanes or public squares through which they may deem it proper to carry the water so taken, and lay, construct, repair and replace any pipes, conduits, hydrants, jets, fountains,” etc., and that--

“The said company may make any agreements, contracts, grants and leases for the sale, use and distribution of water as may be agreed upon between said company and any person or persons, associations and corporations, and with the town of Superior, or neighboring towns, or the said company itself may take and use the surplus water for manufacturing and other purposes; which said agreements, contracts, grants and leases shall be valid and effectual in law.”

On the 15th day of October, 1887, the village of Superior was a duly incorporated village under the laws of the state of Wisconsin. On that date the village board of the village of Superior, for the purpose of providing for the protection of public and private property in said village against fire, and supplying the inhabitants thereof with water for domestic and public uses, passed an ordinance granting to the Superior Waterworks Company the privilege of establishing, maintaining, and operating a system of waterworks in said city, in and by the terms of which it was provided that the said village of Superior grant to no other party or parties a similar franchise for the period of 30 years, and that--

“At the expiration of the said thirty years, should the said village refuse to grant to the said Superior Waterworks Company, its successors and assigns, the right to continue and maintain said system of waterworks for another term of thirty years, upon the same terms and conditions as may exist between the said village or city and the said Superior Waterworks Company, at the expiration of the first thirty years, in and upon the public grounds and streets of the said village and to supply the said village and the inhabitants thereof with water on reasonable terms, then and in such case, the village shall purchase from said Superior Waterworks Company, its successors or assigns, said system of waterworks and the property connected therewith, at a fair valuation as provided for in section 13.”

By section 13 it was provided that the city might purchase and the company bound itself to sell its property, franchises, etc., to the city at the expiration of 10 years from the passage of the ordinance, and at intervals of 5 years thereafter, in which case the village and the company were each to select an appraiser, the two to select a third, who should determine the value of the said waterworks; their valuation to constitute the purchase price to be paid therefor.

It was provided that the main source of water supply should be the Bay of Superior, and that the water should be filtered through a sand-filled crib, and then by an additional process of mechanical filtration, either by the “Hyatt System” or some other system of filtration giving equally pure water. “It being agreed that the water so filtered is to be pure and wholesome and suitable for both public and domestic use.” It was also provided that if the said village of Superior shall procure for the said Superior Waterworks Company without cost or expense to said company the valid and indefeasible right to extend and lay its pipes across the said Bay of Superior and across Minnesota Point to the shores of and into Lake Superior on and along the shortest line from the location of its pumping station to the shores of said lake, the said Superior Waterworks Company shall within one year after receiving notice of the acquirement of said right of way, extend its pipes into Lake Superior and take the supply of water therefrom.

On March 25, 1889 (Laws 1889, c. 152), the territory constituting the village of Superior was incorporated into the city of Superior under the laws of Wisconsin for the year 1889. On November 1, 1889, said Superior Waterworks Company sold, assigned, transferred, and conveyed to the plaintiff, Superior Water, Light & Power Company its said waterworks system and all its property, real and personal, and all its rights under the ordinances of the village or city of Superior. On October 1, 1889, the city council of the city of Superior passed and adopted the following ordinance:

“Section I. Ordinance number 5 of the general ordinances of the village (now city) of Superior, entitled ‘An ordinance amending and re-enacting section 13 of an ordinance authorizing the Superior Waterworks Company, its successors or assigns, to construct, operate and maintain a system of waterworks in the village of Superior, Douglas county, Wisconsin, and contracting with said company for a supply of water for the use of said village and the inhabitants thereof, and defining their rights, privileges and powers,’ is hereby amended by striking out of said ordinance all of said ordinance after the words ‘section 13,’ where the said words ‘section 13’ occur, in the thirteenth line thereof and inserting in lieu thereof the following:

This ordinance is passed upon the express condition that at the expiration of twenty years after the date of the passage of this ordinance and of every fifth year thereafter, the city of Superior may, at its option, purchase from the said Superior Waterworks Company, its successors or assigns, the entire plant of the said Superior Waterworks Company its successors or assigns, and including all franchises theretofore granted to said Superior Waterworks Company, its successors or assigns, by the village or city of Superior, by paying therefor, in cash, an amount of money of which the net earnings of said Superior Waterworks Company, for the year next preceding the purchase thereof, by said city, shall be five per centum. Such purchase shall be made in the following manner, to wit: The common council at its first regular meeting after the expiration of said twenty years, or of any fifth year thereafter, may pass an ordinance declaring its intention to purchase said plant and franchises appropriating the necessary funds therefor and directing the city clerk of said city, to serve upon said Superior Waterworks Company, its successors or assigns, a copy of said ordinance, together with a notice that at the expiration of one year from the date of the service of said notice, the said city will pay to said Superior Waterworks Company, its successors or assigns, the price of said plant and franchises, determined as by this ordinance provided, and will assume possession of said plant and franchises. Commencing with the day following the date of the service of such notice, the said Superior Waterworks Company, its successors or assigns, shall keep an accurate account of all receipts and disbursements of said company, in a set of books kept expressly for that purpose and for no other, which said books shall at the expiration of each quarter year thereafter be open to the inspection of the city comptroller of said city. At the expiration of one year from the date of the service of the notice above provided for, the said Superior Waterworks Company, its successors or assigns, shall submit to the comptroller of said city, the said books of account, and the price to be paid for said plant and franchises shall be deter mined therefrom, as hereinbefore provided and upon the payment, in full, of said price, the said Superior Waterworks Company, its successors or assigns, shall surrender to said city its said plant and franchises complete. The words ‘net earnings' as used in this ordinance, shall mean the gross earnings of said waterworks, less the actual operating expenses thereof.

Section II. This ordinance is passed upon the consideration to the city of Superior that the said city is hereby released and relieved from the duty, cost and expense of procuring, for said Superior Waterworks Company, the valid and indefeasible right to extend and lay its pipes across the Bay of Superior and across Minnesota Point, to the shores of, and into Lake Superior, as provided in section 2 of said ordinance number one of the general ordinances of the village of Superior and that all that part of said section No. 2, commencing with the word ‘provided’ in the twentieth line thereof, down to and including the word ‘completed’ in the sixty-second line thereof, is hereby repealed. And this said ordinance is passed upon the further consideration to the city of Superior, that by the acceptance hereof the said Superior Waterworks Company binds itself, its successors and assigns, to obtain at its own expense an adequate supply of good and wholesome water for domestic and public purposes from said Lake Superior and to...