The Salt Lake herald. [volume] (Salt Lake City [Utah]) 1870-1909, 1898-05-19

IOr damages and for such other and FUR
t1er relief as may be just and equitable
The evidence shows that the defendant
Bear Lake and River Water Works and
irrigation company, and the Bear River
pany, are inSolvent; and further that Og
den city has been paying to these cor
porauons since January l, 1891, the sum
of so per annum for each hydrant used
by the town for municipal purposes.
There was much evidence elected at the
trial, concerning the relative efficiency of
the old system and the new, and touch
ing the degree of necessity which there
was to build a new system at the time
the Boutwell, contract was entered into.
and relating TO the reasonableness of the
against the city for furnishing water for
the irrigation of parks and public places,
and bearing upon some matters of eStop-
pei which have been pleaded by the de-
PENDANTS, but / think it not necessary to
state at this time any ultimate findings
upon those matters.
CONCLUSIONS OF LAW.
Upon the case which have thus stated.
the general question for decision is, what
conclusions of law must follow.
Considering the relation of the parties.
and the nature of these transactions, it
is difficult to apply rules of decision in
other cases, and be sure of doing prac-
teal justice
The difficulty lies not so much in de-
termining the legal relation of the part
les to the contract. as il does in determin-
ing the ana extent OF the remedy
SO far as the legal relations of Ogden
city to the defendants, concerning the
property rights, income and franchises
of the old system, il seems to me it is
that of trustee and ceStui que trust. That
a court of equity will afford relief to a
municipality or its inhabitants, against
collusive alterations by town councils of
property and funds held to public use,
lin conformity with law for the ben
eft of the town, or its Inhabitants. is a
doctrine of old standing, in the courts of
this country and England. and such exer-
else of the equity Jurisdiction has been
put upon the distinct ground that prop
erty thus held to such uses is held upon
public trust.
This was decided in the English Chan
Gerry at least as long ago as 1887. in the
case of the Attorney General V. Aspin-
wall, Myln & c. In that case there was
a demurrer TO the complaint on the
ground that there was no equity in the
bill, and the demurrer having been al
lowed by the master of the rolls Gord
Langdale), upon appeal, the Lord Chan
cellor Cottenham, upon great cOnsidera-
ton, decided that property held by a mu-
nicipal corporation under its charter, and
devoted to certain public uses was held
upon a public trust. and any appropria-
ton or alienation of ii by the town coun-
ell TO purposes inconsistent with such use
without the authority of an act of par
lament, was a breach of trust and that
therefore the case came under an ac-
knowledged head of the equity jurisdis-
ton.
The general doctrine and its various ap-
plications are set out by Mr. Dillon with
his characteristic lucidity in chapter %
of his work on Municipal Corpora tons.
me supreme Court of the United States
ana the highest courts of several of the
states, have also declared and enforced
the doctrine.
Now the fact is as before stated. that
here is n case where the town council has
for nominal consideration leased per-
petuaily valuable water works system
70 the defendants and has agreed with
them that the works shall be destroyed
and that the town shall disable itself
from entering into competition with the
water company and from furnishing wa
ter to the inhabitants of Ogden city 1t
seems TO me that this was q colluSive
alienation of trust property and that in
respect of ii, the defendant must be
charged as taking and dealing with il i'm
pressed with a trust. and l decide that
the transaction was a breach of trust
ultra wires and void.
NOT IN A BAD SENSE.
The word "collusive" is not used here
In bad sense, but as said by Lord Cot
senham in a like case as including the
case or persons taking a part of the cor
ooration property for their own benefit.
With knowledge of the circumstances of
the property. and of the questions which
would arise as to the right of the corpor-
alton to make such alienation
1t is true that the complaint in this case
does not in terms allege a breach of trust
nor does il impute fraud in the proceed
ngS OF the town council Put a trustee
may be guilty of breach of trust from
error or ignorance of duty, and if it were
necessary to impute fraud the term it
self need not be used. ii is sufficient if
the facts stated amount to a case or
fraud"
Attorney General V. Poole, 4 Myl. & CT.
1850.
I decide further as matter of law that
me town council of Ogden has authority
lnoer its charter to grant franchises 20
other parties to furnish water to the CITY
and its Inhabitants. Whether such grant /
must be by ordinance, l think 1t not nee
sssary to decide in this case
The water company is at least a licensee
d. the town according to the evidence
given before me. and has expended an
enormous sum of money in building the
new system. and therefore 1 decide that |
the prayer of PLAINTIFFS complaint for a /
iecree compelling the defendants to sur
,,ender the new system to plaintiff, Oe- /
len city, should be denied, but that iudc- |
nent should De for the plaintiff for the |
possession of any part of the old system |
n the possession of the water company,
including the water right, and including |
also the money which was collected bV |
he defendants for water rates and dues |
'wing by the inhabitants to Ogden city |
since July l. 1890.
ACCOUNTING ORDERED.
1 decide further that an accounting |
should be had between Ogden city and |
nine:
First-How much. if anything. is due (
rom defendants to Ogden city for water |
'ents and dues which were collected of |
he earnings of the old system. and how 1
nuch could have been earned by the old /
'ystem. if it had been operated BY de- /
under the lease, or in other |
words, the value of amount of the earn |
ng capacity per annum of the 1
I'D system since October q. 1885, if IL I
lad been operated.
Second-I1ow much, if anything. has
'een paid by Ogden city to defendants |
inder the terms of the Boutwell, contract
or water for municipal purposes since
october r. 1890, the time when the old
lants.
Third-The amount and description and
'alue of property of all kinds. if any. /
which has been appropriated by defen-
ANTS or either of them. belonging TO the
10 system, and which was turned over IN
he Bear Lake and River Water Works
ma Irrigation company under the resoiu-
ION OF October (. 1890.
Fourth-And generally an accounting
lpon all other matters properly cogniZa-
lie IN court of equity upon an account
nS between the trustees and cestui one
rust relating to dealings with the prom
rty and franchises of the old svsten,
ince October q. 1890
Let findings and decree be entered az
ordingly OGDEN HITES
May 1S 1898. '- - = uuse
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