Omaha daily bee. (Omaha [Neb.]) 187?-1922, 1906-09-30
WATER FRANCHISE IS DEAD
Judge Mcpherson Rules the Contract
Expired January "a
NO RULING ON THE QUESTION Of RATES
Court Holds that auestion Not Before
Il. but states in Passing Rates for
water Musf Ne Reasonable
and Hemunerative.

Water Works company expired On January
"a OF this year. and the injunction proceed
ings brought by N. p. Dodge at the time
OF the granting OF the franchise In 1881
and the extension of time In which TO com
plete the construction OF the plant granted
by the city council did not extend the life
Of the franchise to December 10 OF this
year or to January a. 1908. is the ruling Of
Judge Smith Mcpherson of the United
States court, handed down yesterday, in
the suit OF George N. smalley, stock
holder Of the water company, residing In
Massachusetts, bso1ght to enjoin the city
OF Council Bluffs from enforcing the orii-
nance passed February q OF this year, and
which provides for a reduced schedule OF
water rates.
The restraining order asked for is denied
and the Temporary Injunction issued Aprl
is set aside and vacated.
The court in its order. however. states:
"This order will not be construed as either
Affirming or disaffrming the rates fixed by
an ordinance of the defendant city passed
on or about February 2. 1906. The ques-
| ton of rates for furnishing water since
the expiration OF the contract of 1881 is
not ruled on" 49,.
Judge Mcpherson passed solely upon the
| question Of the expiration of the franchise
of the company.
ouestion of Rates.
| Regarding the question OF the fairness
of the rates provided for in the ordinance,
Judge Mcpherson has this to say:
| Courts approach these questions with
hesitancy, and will not consider them until
| an issue thereon is squareiy presented and
until II becomes the bounden duty OF the
| must be remunerative, and the city and
it's inhabitants cannot exact service with
out Paying price thsrefS
| arbitrarily fixing rates over the protest of
| the company cannot be enforced, unless
such rates are remunerative. But the
meaning OF the word remunerative and how
applied and on what state Of facts APP
piled. are questions OF the gravest concern.
| This Is so, because on the one hand. any
| public service eorporation cannot be re-
quired to invest Its money and perform the
city council cannot OF and by itself,
arbitrarily determine such questions, and
place themselves beyond the power OF the
enough to consider those matters when
they are presented. as possibly they
both parties. such litigation is always
regretted by all fair minded people. and all
such people express the hope that that
| question may be amicably settled and
! not drive the court to hear volumes OF
| evidence and lengthy arguments thereon,
and lack of satisfaction continuing after
| decree Is entered.
IN hts opinion Judge Mcpherson briefly
discusses the relations OF the city and the
waterworks company since the expiration
of the franchise or contract. He states in
plain language that neither the city nor
the company can coeree the other; that
in, the absence of an express contract the
| water company is still operating the works
with the consent and probably the request
of the city and furnishing water to the city
; and it's Inhabitants under an implied con-
4 tract that It shall, be paid a remunerative
price to be nxed either by agreement OF
by the court. 81
i "or II this is not the policy to be pursued
take 1T that the city and its inhabitants
will be denied water. and the rights OF
the company be at an end. Neither the
\ company nor the,city can coerce the other
No Appeal at Present.
It lie understood that no appeal will be
taken, at the present time at least by the
water works company from Judge Nc
Pherson's ruling. An amendment will likely
be iled In few days to the original petit
tion setting out In detail the claims as tC
the unreasonableness OF the schedule Of
rates fixed by the ordinance Of February %
Then when the city files it's answer 20 thu
questions thus raised a further hearing will
be had. Application. It Is expected. will b,
made at once by counsel for Mr.. Smalle,
for temporary restraining order enjoininf
the city from enforcing the reduced rates
until the question Of their reasonablenes,
Is determined by the court. After a rulinl
Is had on this question. then possibly an ap
: peal might be taken OF the whole case
Further litigation. however may b.
avoided 1t is possible that the repor
which Expert Kiersted is now preparing
for the city as to the value Of the presen
: water works plant and the cost Of con
: structing a new one may pave the way Il
an amicsble agreement between the cit!
: and the company as TO basis for the con
tinuation OF the compsny's service