The herald., 1897-08-08
Water Company Assessed
at Sl5O,OOO
IMPLICATION FOR REDUCTION
ALSO a LEGAL OPINION FROM
ITS ATTORNEY
FINANCE Committee Finds Little to Do.
Various Bridges in Need of Re-
pairs-City Hall Notes

The water company's asseesm ent was
doubled yesterday morning, over that of
last year, but the city assessors valua-
tion Of $500 900 was scaled down to $780,
900, Just one-fourth of what that official
valued the plant. ~
Stephen D. Mott, secretary of the wa
ter company, was present, and formally
rendered to the board of equalization the
company's written application for re-
duction, which was as follows:
THE APPLICATION
The Los Angeles City Water company
resnectfully represents that it is the owner
and party affected by the excessive as
sessed valuation of the following described
property in the city of Los Angeles, county
of Los Angeles, which property is assessed
on the assessment roll of said city as fol-
lows, to-wit: Franchise, $500, ,000; and your
applicant asks that the said assessment
thereof be reduced to 100000
That the grounds upon which such re-
duction is asked and should be made are
as follows, to-wit
The lease from the city of Los Angeles,
which is included in the said assessment
run, and the franchise of the Los Angeles
City Water company only little more
than year before they expire, and the
assessment of the franchise Qncluding the
lease) at 5000, 900, is excessive, and for the
reason that the unexpired leasehold and
unexpired franchise (being but for one
year, subs tantially), has no such value as
$500. 900: and, besides, the franchise to sup
ply the city of Los Angeles and its in
liabitants with water is granted to the Los
Angeles City Water company by the said
contract. and the compensation for it, to
be4paid to the city, is already agreed upon,
and that compensation is the annual rent
and the furnishing of the city with water
free for all the municipal purposes enum-
Grated in the contract, and also putting in
fire hydraNts and maintaining them at its
own expense, which is the compensation
agreed tofbe paid for the said franchise
of supplying the inhabitants with water.
taking rates therefor, and no further
charge ought to be made.
That the actual cash value of said fran
chise, including said lease so assessed as
aforesaid, does not exceed 500, 900.
Wherefore, your petitioner prays that
reasonable notice of the hearing of this
application be given, and that the reduc-
ton of the valuation of the said franchise,
including the said leasehold, to 500, 900, be
made.
"A
BY S. H. MOTT Secretary.
A LEGAL OPINION
John S. Chapman, the attorney for the
water company, had prepared an opin-
ion, which Mr.. Mott also presented. The
document is quite lengthy, and is here
with given in full, as follows:
In regard to the application before the
board of equalization for the city to cut
down. the valuation placed on the fran
chise, the only suggestions that have to
make to you are the following:
F'irst-In the City Of Los Angeles VS..
Los Angeles City Water company, reported
in the 61st Cal Rep, page Go, the question
was this: In 1879 the mayor and the city
council of the city passed an ordinance
imposing a monthly rate or license upon
all persons or corporations, not municipal
vending water for domestic purposes, and
the action was brought in the superior
court to recover these rates of the Los
Angeles City Water company.
The supreme court, after referring to
the contract of 1868, and especially to those
provisions which provided for the pay
ment of an annual rent, and also to furnish
water for the public schools, city hospitals
and jails free of charge, and that it was
provided in the contract that the same
should be received in full payment for all
rents due, and to grow due from the said
City Water company to the said city, for
the uses and privileges given and granted
in said ordinance, said that the plaintiff,
the city, had already reserved the sum to
be paid by the defendant for the privilege
of vending water for domestic purposes
and that it could not change the contract
in the manner proposed. The privileges
granted by the license and ordinance of
1868 had already vested in the defendant as
securely as they could be by the license of
1879. A license is grant of permission and
authority, and the defendant already has
permission and authority granted by ordi-
nance and ratified by the legislature, and
the city could not, during the term of the
license, of its own motion increase the
amount to be paid for the privileges
granted.
The supreme court quoted approvingly
the case of Stein VS.. Mayor, ETC., of Mo-
bile, 40 Ala. 1862, in which, after setting
forth the contract made by the city of
Mobile with Stein, whereby the city trans
ferred to him certain water works for a
term OF twenty years, and granted him
the exclusive privilege of supplying the
city with water during the said time it
was held that the city of Mobile could not,
during the C ontinuance of the contract, re-
quire Stein to pay a license or tax for
carrying OH the business within the limits
of the city. Our supreme court also said
that that contract between the city of Mo-
bile and Stein was substantially the same as
the contract between this city and the City
Wafer company; and that there, as we'll
as here, an attempt was made by the city
authorities to impose upon the lessee the
obligation of paying a licensed or tax for the
privilege of carrying on the business And
further held that the city could not pass
bylaw or ordnance which impaired the
obligation of contracts; and that the ordi-
nance which assailed the privileges al
ready granted did impair the obligation of
the contract upon which it depended, and
was void; and the tax levied under its
authority by way of license. could not be
supported; that the city, by this contract
and for various considerations. gave to
the parties under whom the defendants
acquired The privilege of introducing and
distributing and selling water to the in
habitants of the city. on certain terms and
conditions, which the water company had
complied with. and 1t was not within the
power of the city authorities, by ordinance
or otherwise afterwards to impose an ad-
ditfonal burden upon the defendants for
exercising the rights and privileges
granted
Now, the franchise of the corporation is
the privilege OF distributing water 10 the
Inhabitants of the city and taking rates
therefor, and for the privilege of exercis-
ing this franchise it has agreed to nav 10
the city SO much per annum and to fnr-
nish 1t with water free for municipal pur
poses. and it is doing it.
In. another case the sunrerne corrt Gotta
tnat independent of the right to exist as a
corporation and the exercise of its povvers
nraf