El Paso herald. (El Paso, Tex.) 1901-1931, 1910-04-26
RATES ARE TOO
LOW FOR ANY
DIVIDENDS
Elk Gov. Savers Says the
City Must Raise Rates Ii
It Is to Get Service.
RULES AGAINST
MINIMUM CHARGE
Intervenors Win Point of
Contention = City Must
Agree to Raise in Rates.

CONTINUED From Page One.i
tract with the city until the ter
mination Of the suit to install an
the reservoirs filled with water, and
to preserve the property from de-
terioration and lack of repair; and that,
OF final hearing the company be re-
quired TO specifically perform its con-
tract with the city
Complainant has excepted to the tes-
timony as shown in section 1.
Revenues Insufficient.
II appears that the city stands upon.
and insists upon. its contract with the
company, as to the terms OF which, and
their meaning there Is no difference be-
tween them. It is manifest from the tes-
timony that the revenues arising from
the operation of the plant have not been
sufficient to enable the company to dis
charge its franchise obligations
and that under the present rates
It has been unable TO secure the funds,
that are needed for the completion Of
the plant as required by its franchise,
and to supply the city and its residents
with the specified quantity of mesa
water.
AT the very threshold the question
arises: Can the court, in the circum-
stances as they appear from complain
ants petition and the testimony, so in
crease the rates prescribed in the erdi-
nances as to enable the receiver or the
company TO comply with the require
ments?
Limitations of Courts.
Courts of equity. as well as Of law,
have their limitations. and those limita-
tions are defined by judicial decision
Certificates to Complete Plant.
The plant, so far as completed, is in
condition the large shaft
we'll. and its revenues are sufficient for
its proper operation and preservation
J. is not doubted that the court may au-
thorize the receiver to issue certificates
for the purpose of completing the plant
SIS required by the city ordinances, to
which the company Is indebted for its
franchise and under which it is oper-
ating: but it is doubted that the court
may, without the consent Of the lender.
subordinate or displace its lien, which
has been put upon the property to secure
the repayment OF its loan TO the COM
pany and which has been used in con-
sfructing the company's present perma-
nent improvements. It is also doubted
that the court may increase the rates al
lowed the company under the ordinances.
IN order to provide for the payment of
such certificates as the receiver may is
sue under its authority; or that the
court may increase the rates based upon
the present value of the plant in order
TO give 10 the company a fair and rea-
sonable compensation on its investment
after the payment Of operating expenses,
including current repairs, and interest,
and sinking fund dues
If the president, manager and receiver
of the company be not greatly in error
no money of consequence can be secured
TO fulfill the requirements of the ordi-
nances and to provide an adequate sup
liz If ha CITY m
people, unless one, or the other, Of the
means stated be employed
No Claims Prosecuted.
II is to be noticed that this is not a
ease where creditors are prosecuting
their claims. aud alleging insolvency or
threatening insolvency, bad management.
waste of property or misapDlication of
revenues; nor is II q case where a legis-
1ature or commission have imposed rates
upon a protesting company. The rates
are of contract between the city and the
company, and constitute an important
and valuable inducement, coupled with
other considerations, for granting the
operating They are an essential part
of the franchise-a contract which can
not be legally broken without the con-
sent of both parties
Contracts Binding.
In Menard VS.. Snyder (29 Texas, 259)
the supreme court of Texas say: As
men bind themselves so must they stand
bound. When the terms of a contract
are free from ambiguity, and not such
as a re against the policy of the law to
enforce, they establish the rights of the
parties in the subject matter, W hich will
be protected and enforced by the
courts and in Thompson vs. Gage s(s4
Texas, 606) the same court say: Courts,
when considering a contract made for
nv los will NO In
other and different one for them" Nor
will ii be going too far TO hold that the
contract between the city and the COM
many. upon which the franchise rests.
comes fully within the protection of the
principles enunciated in the great Dart
mouth college case: than which no other
decision OF our greatest court has been
more firmly established and more gen
eralIv recognized. Upon the power Of
the court to postpone or subordinate the
existing lien iof $4,000. established
March /. 1906 in favor of certificates to
be issued by the receiver. under author
ity of the court, in order to complete
the plant as required by the ordinances.
counsel for the complainant insist, and
cite Miltenberger VS.. Logansport r. r.
(1s6 L. s., 1850 and Ellis vs. Water Co.
CSC Texas I'D as supporting their con-
tention In the former case the court
quotes from Wallace VS. Loomis (97 O.
s, 1852. approving the principle therein
recognized, as follows The pow er OF
court of equity TO appoint managing re-
ceivers of such property as a railroad,
when taken under its charge as trust
fund for the payment of membranes.
and TO authorize such receivers to raise
money necessary for the preservation
and mana cement of the property, and
make the same chargeable as lien
thereon, for its repayment. cannot at
this day be seriously disputed. 1t is
part of that jurisdiction, always exer-
cised by the court. by which 1t is its duty
to protect and preserve the trust funds
IL its hands. 1t is. undoubtedly. pow