The herald., 1898-10-25
AN ACCOUNTING ASKED
SEPARATE ACTION BY THE CITY
FOR DAMAGES
OFFSET TO C0MPANY'S CLAIM
Los Angeles City Water Company the
Pricipal Defendant in BOTH
Actions-Court Notes

Two actions have been commenced by the
city of Los Angeles to recover tne Vaiue u
the water which the Los Angeles olty aver
company has taken from the river sinoe 'ne
date of the contract OF looo,
The comnlaint in one OF the actions asks
for an accounting in respect OF the money
received by the Los Angeles City water
company on account OF sales OF TINS water
during the whole period, the facts conlaiheo
in the complaint in the action 1or lhe ap,
no;ntment of the receiver being nearly all
set forth in this new sult, with the auoltloil
of other allegations.
1t is charged that the company ntehdeu'
when it first entered upon the construction
of the improvements to the city water works,
as required by the contract, TO get
the water from the Crystal springs, put
that it was soon ascertaned that this spring
would not furnish more than thirteen lnches,
whereas at least 100 inches were required !;
and that, when this discovery was made, the
company surreptitionsly constructed a
trench through the spring (Which is alleged
to have consisted OF swamp! ana up
through the river bottom to the surface
channel of the river, the trench being CON
cealed bv the numerous willows and other
vegetation on each side; and it is claimed by
the city that its authorities did not discover
the connection with the surface stream until
the water works had been completed, and
the population of the city had grown to lO,Ooo
inhabitants, when it was impossible Tor the
city to have stopped the diversion OF the
water by the company on account OF tne
fact that the only water works were those
held by the company, and a water famine
would have ensued.
The city also claims in that suit that the
lessees in the contract were obligated 10 1ur
nish water from their own resources, and
were not entitled to take the water OF the
river above the quantity of ten inches, and
that, when they showed their inability to
furnish the necessary water, the city was
entitled to forfeiture of the contract, which
forfeiture, however, could not be enforced
on account of the fact, above mentioned,
that there would have been failure OF the
water supply of the city, had the company
been prevented from making use OF the
river water
1t is also claimed that the waters diverted
by the company through the percolating
pipes of the Crystal Springs Land and
Water company are part Of the river, and
that the city is entitled to them. in the same
manner that it is entitled to use the surface
water.
The complaint alleges that the company
has collected at least S5,000,000 on account
of water rates during the period of the lease,
of which 81 00O. 900 are profits over and above
the expense of maintaining and operating the
works; and it is further alleged that one
half of these profits represents the value of
the use of the river waters. to which the
city is entitled by reason of its ownership
OF those waters.
The prayer asks that an accounting be had
between the city and the water company,
and that Judgment be rendered in favor of
the city for its just proportion OF the reve-
nues derived by the company, and that the
amount of this Judgment be Offset against
any award which may be made by the ar
bitrators on account of the value of the
works which have been constructed by the
company during the term of the lease.
This suit is against the Los Angeles City
Water company, Crystal Springs Land and
Water company, East Side Spring Water
company and S. G.. Murphy, trustee,
the additional parties being brought in on
account of their ownership of certain por
tons of the water works, the value of which
is to be arbitrated.
SUIT FOR DAMAGES
The other action is simply brought to re-
cover of the Los Angeles City Water COM
pany the value of the use of the water taken
by the company since October 10Th, 1896,
when the city, by resolution of its council,
prohibited the company from taking any
water from the river unless it would agree
" pay uAe tIty ~ pei 1Ciil Vi VIC Sioss iulCo
received by the company on account of the
sales of such water.
The complaint in this action alleges that
the company refused to pay the 40 per cent
as required, and that the value of the use
Of the river waters, taken by the company
from October 10, 1896, to July 23rd, 1898,
(when the lease expired), is $3.50, 1000, for
which judgment is asked.
The reason that two suits are brought is
b. 10. .h,,a ~; l. !
be raised by the company with regard to
the right OF the city to bring a particular
form of action, and the probability is that
only one of these suits will be tried These
actions will not interfere with any of the
pending litigation on with the arbitration
which is now under way.
1t will be remembered that the water com
pany, several weeks ago, presented. claims
(aggregating some $l50,0O0) against the city
for alleged damages in the reduction of
water rates in 1896 and 1897 below those
fixed by the contract of 1868.
The position of the city is that inasmuch
as the rates were based on the value of the
whole plant, water as well as works, the
company received not only more thaA lust
compensation for the use of water which be-
longed to the city, but that, so far from the
company being entitled to recover the dam
ages claimed, the city should be paid con-
siderable part of the revenue derived by the
company from rates thus based on the works
and the. water. Judge Oster, in deciding
the receivership case, held that there was an
enforced partnership between the city and
the company, resulting from the fact that
the former owned the water while the works
belonged to the latter, both of which were
necessary for the operation of the plant, and
that therefore the city was entitled to a
portion Of the water rates, based on the
value Of the river water, and that, on the
other hand, the company should be given
portion OF the rates proportioned on the
value of its properly.