The Omaha morning bee., 1924-05-16
City Wins
Judgment
of $4,000
John Lee Webster Produces
Witnesses Who Testify
That Cudahy Company
Had Secret Agreement.

A judgment for $751; 900 in favor of
the Cudahy Packing company against
the city of Omaha was reversed by
Federal Judge j. w. Woodrough in
federal court Thursday afternoon
after three officers of the former
Omaha Water company had testified
that an agreement, of which the
Cudahy company had r copy, nulli-
fled the contract upon which the suit
was based.
The Judgment had been given In
favor of the packing company after
lit had sued for return of money al
legged to have been paid unnecessarily
to the city for water. The oyerpay-
ment was said to have been made
during the years of 1872. 1913 and
1914, after the city of Omaha had
purchased the water plant from the
defunct Omaha Water company and
had raised the price of water to the
packing plants from 4 41-2 cents per
l 900 gallons to 8 cents per 1000.
Contracts Differ.
The packing company was in pos
company, calling for delivery of
water at the lower price for 10 years,
starting October. 1904 1t failed TO
present as evidence an agreement
which nullified the contract in case
OF the purchase OF the water plant
by the city. The reversal of the suit
was based on this agreement.
Litigation of the Omaha Water com
pany started in 1895. when the COM
pany went into the hands of the re-
ceiver. Contracts were given to each
of the packing companies in South
Omaha at that time for the delivery
of water over a period of nine years
at price OF IL cents per 1000 gal.
Ions. These contracts contained a
clause that made them worthless
should the city purchase the water
company property.
In 1904, when these contracts ex-
pired none of the packers but Cudahy
made an effort to renew them. Cuda-
by solicited contract and II wab
awarded, but contained no clause that
would protect the city in event of its
purchase of the water plant.
Rates Raised.
When the city finally bought the
plant in 1912. three engineers, one
from Kansas City, one from st. Louis
and one from the University OF Ne.
braska, were called TO place valua-
ticn on the plant and an estimate of
what water should be sold for.
These engineers declared that the
minimum price of water to the pack
ing houses must be cents per 1000
gallons. All OF the companies but
Cudahy paid the additional price with
out objection. Cudahy. however, filed
notice OF protest.
The raised price was aaid until 1914.
when at the expiration OF its con.
tract the company filed suit TO re-
cover 1000. This suit, after great
deal OF litigation. was finally won by
the packers and a judgment for $751;
900 was handed down.
Second Contract Discovered.
John Lee Webster. attorney. then
began to investigate. He went TO
New York and talked with Theodore
C. Woodbury.. former president of the
Omaha Water company. Woodbury.
told Webster Of the agreement protect
ing the city, saying that he had re
fused to sign the second contract un.
til the agreement was drawn up and
signed.
That was the first that had been
heard of this agreement Woodbury.
suggested that Webster see L. NJ.
Fairfield OF Chicago, general man
ager OF the old company. Fairfield
told the same story and advised Web.
ster to see A. y. Hunt, former super.
intendent OF the old company and
later superintendent of the plant un.
der the direction OF the Metropolitan
Utilities District. Again Webster
heard the same story of an agreement.
The case was reopened, the paying
OF The Judgment delayed and both
Former Officers Testify.
Wednesday tho case was opened be
fore Judge Woodrough. Testimony
was taken throughout the day. Thurs.
day morning websters three star wit
nesses took the stand. They arrived
In Omaha at and we're on the stand
by 10
Woodbury., called first. testified that
the agreement was signed and that he
knew nothing of the suit prior to
the appearance OF Webster in New
York. Fairfield offered similar testi-
monv and Hunt eWore to the elstenee
OF the agreement.
The packing company had no eoun.
ter evidence 10 offer and Judge Wood.
rough charged the jury to return n
verdict in favor of the defendant. tho
city OF Omaha.
Taxpayers OF Omaha were saved
approximately $4,000. the principal
OF the first judgment and interest FOR
~ years.