The herald., 1898-06-05
The ORDINANCE INVALID
THE CONTRACT OF 1858 Is DE.
CLARED BINDING
CITY CANNOT REDUCE RATES
Those Fixed in 1897, Below the Pre-
scribed Minimum, Are
Knocked Out

Only a brief synopsis has as yet been
published of the important and exhaustive
opinion delivered in the United States dis
trict court last Tuesday, the S1st ult., in the
suit brought by the Los Angeles CITY
Water company against the city OF Los
Angeles. The decision is of such far-
reaching character, affecting, as 1t does,
number of similar suits, that The Herald
herewith presents the full text of the de-
cision, In brief, the action was brought to
have the city ordinance passed In 1887, FIX
ing water rates for the year, beginning
July, 1897, declared invalid on the ground
that such was in conflict with the terms of
the contract entered into in 1868 by the city
of Los Angeles on the one side and Messrs.
Beaudry, Griffin and Lazard, the assignors
of the Los Angeles City Water company,
on the other.
Judge Wellborn's conclusions are that the
contract Of July %, 1858. insofar as 1t pro-
vides that the city shall not reduce water
rates below those charged at that date is
valid, and therefore that the ordinance OF
1897, which was passed pursuant to consti-
tutional and legislative requirements OF
the state of California, does fix water rates
below the minimum SO prescribed. thereby
impairing the obligations of said contract,
and should be annulled.
The full text follows:
In the Circuit Court of the United States,
Ninth Circuit, Southern District of Cali
fornia.
Los Angeles City Water Company ct. al,
Complainants, v. the City of Los Angeles
ct al, defendants. No. 1874.
OPINION OF COURT ON FINAL TRIAL
This suit, which is now under submis-
sion on the pleadings and agreed state
ment of facts, was brought to annul an
ordinance of the council of the city Of Los
Angeles, adopted February 2Sd, 1897. fixing
water rates during the year commencing
July 1st. 1897, and ending June the 3oth,
1898, on the ground that said ordinance
tmpairs the obligation Of the contract
herein mentioned, and is. therefore. re-
pugnant to the constitution Of the United
States.
The material facts Of the case are these.
On July the 22nd, 1868, the city Of Los
Angeles, as party of the first part, and John
s. Griffin, P. Beaudry and Solomon Lazard,
as parties of the second part, entered into
a contract, whereby said city, for the con-
alterations below indicated, leased its
water works to said Griffin, Beaudry and
Lazard. and their assigns, for a term OF
thirty years, with the right to lay pipes in
the streets, and sell and distribute wate;
for domestic purposes to the inhabitants
OF said city. and to receive the profits there
of, and with the additional right to take
water from the Los Angeles river at a
point at or above the present dam; pro-
vided that the said parties of the second
part should at no time take from said
river, for the use of said water works,
more than ten inches of water without the
previous consent of the mayor and
common council of said city; and
that they would within sixty days
from the date OF the contract, Sc
lect the point where the water
should be taken from said river, and the
city bound itself not to make any other
lease, sale, contract, grant or franchise tc
any person, corporation or company, for
the sale or delivery of water to the inhabis-
ants of said city for domestic purposes dur.
ing the continuance of the contract, and
reserved the right to regulate water rates
as follows: Always provided that the
mayor and common council of said city
shall have, and do reserve, the right tc
regulate the water rates charged by saic
parties of the second part, or their assigns
provided that they shall not so reduce such
water rates or so fix the price thereof tc
be less than those now charged by the par.
ties of the second part for water"
For the lease and grants aforesaid, tin.
parties of the second part undertook and
promised pay to said city yearly rental OF
fifteen hundred dollars, to cancel certain
claims Of said parties against said city
amounting to about eight thousand dollars
to lay down in the streets of said cit,
twelve miles of iron pipes, of sufficient ca
pacity to supply the inhabitants of sait
city with water for domestic purposes, ant
extend said pipes as fast as the citizens de-
string water for domestic purposes woul,
agree to take sufficient water to pay ter
per cent. per annum upon the cost of sucf
extensions, and erect one hydrant, a!
protection against fire, at one corner O,
each crossing of streets where pipes were
or might thereafter be laid; to erect an or
namental fountain on the public plaza at {
cost not to exceed $1,000; to construct ant
erect within two years such reservoirs, ma
cninery' ditches and fumes as would Sc
cure to the inhabitants of said city a con
slant supply of water for domestic pur
poses; to furnish water, free of charge. fo
the public school houses, hospitals and iails
to keep In repair all of said improvement
at the cost and expense of the parties of tn
second part for said term of thirty years
and to return said water works to sal,
party OF the first part at the expiration O
said term in good order and condition. rea
sonabe wear and damage of the element
excepted, upon payment to said parties O
the value Of the aforesaid improvements
to be ascertained as provided for in the con
tract; to give bond in the sum of twent,
thousand dollars for the performance n
SAID contract, and to pay all state an
county taxes assessed upon said waite
works during said period of thirty years.
Griffin, Beaudry and Lazard applied fo
and procured said contract on behalf an
for the benefit of themselves and other per
sons with the intention Of forming a cor
poration to carry out said contract. and al
terwards. about the middle or latter part q
August, 1868, themselves and said othe
persons being the incorporators organized
under the laws of the state of California
the Los Angeles City Water company fe
the purpose of supplying the inhabitant
of said city with wataer for domestic pu,
poses, etc., under the terms of said cor
tract. and assigned all their rights an
franchises under said contract to said CON