The Birmingham age-herald., 1914-04-21
WATERWORKS CASE
 WILL BE APPEALED
Validity of Contract Is Issue
 at Stake
LINE OF DEMARKATION
City Contends It's Sovereign Police Power Gives Ii Authority to Regulate Rates in Spite
 of Contract

In all probability according to an nouncemeut made yesterday by the oity commission. the injunction suit of the Birmingham waterwsrSs company against the city of Birmingham will be appealed to the supreme court of the United States.
 \ serious and important question, the main question at issue -n the case. ac-
 cording to City Commissioner James weatheriy. is whether a definition of the the sovereign police power of city to
 lsgislate on public service corporation rates. regardless of any contract that might exist between the corporation and the city.
 The counsel for the city has contended in their arguments of the case that &
 city has such sovereign rights indepen-
 dent of any contract that might exist.
 and they have cited important decisions
 to uphold their position. Counsel for the waterworks company have contended that the city Is bound Just as much by the contract between 1t and the water works company as two private business
 firms would be bound by law by such a contract. Judge W. l. Grubb in his orig
 inal decision granting the injunction against the lower water rates called for
 by the city. upheld the waterworks coun- sci arguments and the appellate courts has now upheld Judge Grubb. A remark able feature of the appellate court de- cision as made Saturday in New Orleans is that 1t is extremely short. merely stat ing the evidence and briefs in the case had been examined as.d attorneys ar
 ..l.sI
 to uphold Judge Grubb. No grounds or written opinions on the ease are given. Line of Demarkation
 | It appears that even counsel for the | city and the city commissioners them- | selves agree that there fs a line of de-
 martation which should divide what is a | legitimate contract and what is an un- l legitimate contract on the part of a mu- nicfpal government In other words, they | believe that there are cases when a mu- l nielpal government should be held by ! law to a contract and others in which | it should not, and to oefne this line of demarsation would be the purpose
 of an appeal to the United States su-
 pieme court. It Is contended that the | municipal government is legislat tive 1 hody, and that, for inssance 1t could sign l an agreement to abolish a fire depart ! ment. but that such an agreement would
 fit be legal and could be set aside be- | fore it's expiration either by a legisla tive ] acc of the government itself or by the 1 courts. That a contract with the city ! does not amount to anything legally or. | on the other hand. that a contract with 1 the city is az binding al contract with | a private individual, 1t is claimed. would
 both be detrimental to good government 1 of a municipality. When such a contract could be set aside by ths municipal gov ernment which made it. and when sucf
 a contract should be hefd binding on such 1 a government is the line of demarlsation | which 1t is believed will be drawn by 1 a supreme court decision and is what is | the basis of contention in the water works suit
 Don't Deny Contract
 | The city does not attempt to deny that
 a contract was made between the city 1 ard the waterworks company regulating rates for certain number of years, but f It does contend that the city never had any right to make any such contract, | or If 1t had the right to make it, it also has the right to annul it at any time it l deems proper.
 It was on the grounds that this con-
 tract is valid and binding between the | city and the waterworks corporation that | Jrdge Grubb granted an injunction | against the city enforcing it's ordinance | to lower water rates. And 1t was fol. l lowing Grubb's decision based on this
 contract that the city filed it's second
 suit. now pending in the state courts l seeking to invalidate the franchise of the | company on the grounds that this con. tract has been violated by the water | works company itself.
 | Commissioner Weatherly. who has beer
 ading the peoples fight for lower
 water rates. said yesterday that the com. n,issioners and city attorneys forces had !, rot yet decided what would be done but that in all probability they would
 appeal the case to the United States su. l preme court.