Case Name: Edward Conery, Jr., et al., vs. The New Orleans Water Works Company et als.
Court: Louisiana Supreme Court
Jurisdiction: Louisiana
Decision Date: 1889-11
Citations: 41 La. Ann. 910
Docket Number: No. 10334
Parties: Edward Conery, Jr., et al., vs. The New Orleans Water Works Company et als.
Judges: 
Reporter: Louisiana Annual Reports
Volume: 41
Pages: 910–951

Head Matter:
No. 10334.
Edward Conery, Jr., et al., vs. The New Orleans Water Works Company et als.
Aot 2To. 5ü, of 1884-, does not- conflict with any article of the Constitution of the State. Ordin. anee 909 passed by the city in persuance of said act is a valid ordinance and the contract made between the City of 3STew Orleans and the Water Works Company is a legal contract.
There is but one object embraced in the title of the act, and all the subdivisions of the title relate to and are intimately connected with the principal object expressed in the title. And as all of the sections of the aot relate and are german to the object expressed, in the title, the act does not conflict with Art. 29 of the Constitution. It does not conflict with Articles áo, á6 and 234 and 57, as the act does not amend the charter of the Water Works Company or grant any extra compensation to the Water Works Company.
The City of iTew Orleans lmd the power to contract for a water supply under the provisions of her charter, and having this power, to contract the price, the kind of water and the amount are matters of legislative discretion vested in the City Council, and when the city confines herself within the limits of her power to contract, the discretion exercised by the City Council will not be inquired into by the courts in the absence of fraud; and corrupt and extravagant legislation, which are beyond the legitimate object and purpose of municipal government.
To impose any public burden upon a corporation not warranted by its charter and against its consent violates both the State and Federal Constitutions.
A j udicial decree interpreting a contract authorized by legislative will, can not prevent tbe legislature from further legislation, authorizing the parties to alter or amend their contract, or to annul the existing and make a new and a different contract.
APPEAL from tlie Civil District Court, for tlie Parish of Orleans. Monroe, J.
JE. JI. Farrar, F. U. Browne, F. I). White and Chas. F. Schmidt for Plaintiff’s and Appellees.
1st. The only issue in this case is the validity of the contract, attacked, upon the theory of law and fact that such contract is based solely on the provisions of Act 56 of 1884.
2d. The Company having elected to deny that they have ever accepted that Act, the controversy is ended.
3d. The other issue made by the company, that the contract attacked is valid, independently of the existence of Act 56, cannot arise in this case :
(a). Because both parties to the contract, having based it solely upon Act 56, are estopped to deny, after litigation has arisen, that it is not based solely on Act 56. Railway Co. vs. McCarthy, 96 IT. S. 267.
(b). Because it does not apxiear that the City would have entered into any such contract upon any other basis.
(c). Because the Water Works Company, having- promoted the act and ordinance, and having induced the City by its conduct and representations to enter into the contract and to change her position to her detriment, is estopped to deny that the contract was not based solely upon the act. Picard vs. Sears, 6th Ad. and E. 475; 16 Wallace, 1; 33 Penn. St. 309.
4th. If Act 56 is immaterial to the validity of the contract attacked, the relations of the X)arties are to be considered under the supposition that no such act was ever passed.
5th. In this view of the case, the contract relations between the City and the Water Works as of that date preclude the possibility of the existence of any xmwer or right in the City to make such a contract.
(a), Because the Legislature had already made a contract for her for the same water supply for the same period, and this contract had been interpreted bythis court, and the interXiretation had acquired the authority of the thing adjudged; and she had no power, express or implied, to override, substitute, amend, or depart from the provisions of the legislative contract made for her. Dillon onMun. Corp., 3d Ed., Sec. 329.
(b). Because such a contract under such circumstances is a mere donation of the funds of the taxpayers without any consideration in law or in fact, and in such a wasteful and wanton abuse of the fiduciary powers granted to the representatives of the people as to amount to a legal fraud upon the public treasury.
6th. The argument addressed to the court attacking- the correctness of decision in the case of the City of New Orleans vs. The Water Works Co., 36 Annual, p. 432, is the last desperate effort to support a desperate case.
7th. Whether right or wrong, that decision, between tlie City and the Water Works Com. pany, is res adjudicata in this case, and in any other case that may hereafter arise between them involving the issues therein necessarily involved and actually decided, to-wit;
(a). That the exemption from municipal taxation granted tlie Water Works Company, in consideration of a free water supply to tlie City, is void.
(&). That said exemption is not tlie sole cause or consideration of tlie free water supply.
(c). That tlie failure of said exemption is only a partial and not a total failure of consideration.
(d). That it was agreed between tlie City, the State and the Water Works Company, that the exemption from taxation and the free water supply should be the exact, equivalents of each other in-value, however different they might be arithmetically.
(e). That as a necessary consequence of these findings of law and fact by the court, the City was entitled to recover her taxes, and the Water Works Company was entitled to recover for liar water supply the exact equivalent agreed on, to-wit: tlio amount adjudged against her for taxes.
8th. All of the above propositions wore ailirmod on the one side, denied on the other, were absolutely essential to the solution of tlio controversy before the court, and wore actually stated and decided by the court.
9th. This being so, the judgment in that case is res adjudicata in all other eases between the same parties and.their privies growing out of the same cause of action, even though the object of the action may be different. Aurora City vs. West, 7 Wall. 96; Cromwell vs County of Sao, 9-1 IT. S. 353; Dorty vs. Brown, 4 Comstock, 73; Out-ram vs. Morewood, 3 Bast. 346; Burt vs. Sternburg. 4 Co wen, 559; Bouchard vs. Dias, 3 Denio, 243; Gardner vs. Buokbee, 3 Cowen, 320; Lumber Go. vs. Buehtel, 101 U. S. 638; Gould vs. It. II. Go., 91 U. S. 526: Beloit vs. Morgan, 7 Wall. (¡23; Memam vs. Whittemore, 5 Gray, 337; Hortoivs. Huxley, 13 Gray, 290: Burlen vs. Shannon. 99 Mass. 203; Tams vs. Lewis, 42 Penn. St. 402; Ghamberlain vs Gaillard, 2(itli Ala. 504; Perkins vs. Walker 19 Yt. 144; Hayes vs. Gudykunst, 11 Penn. Sb. 221; Peterson vs. Lothrop, 34 Penn. Sb. 223; Jackson vs. Lodge, 30th Cal. 28; Danaliervs. Prentiss, 22d Wis. 313; Barrs vs. Jackson, 1 Youngo & Gol. Gh. Gases, 585: Canjolle vs. Leirie, 33th Wall. 469 ; Stewart vs. Stobbins, 30 Miss. 66 Kingsland vs. Spalding, 3 Bard. Gh. 341; Goodrich vs. City, 5 Wall. 566. Tlievenin c. Dufour, Sirey, v. 31, 41; Saint-Lóonard o.Bal. J. du P., 3843, vol. 2, 247; Gleizé c. Héritiers Gleizéo, J. du V. 3859, 514; Gass., 13 fóv. 1860 (Giudicelli), Sirey, v. 60, 1. 545; Gass 26 aoftt, 1873 (Commune de Cliaucevignoy) Sirey, v. 74, 1,294; Heroman et al. La. Institute, 34 Ann. 810.
10th. Being res adjudicata it has become a vested right, the property of the City of New Orleans, and is beyond the power or reach of any court — even of the court that rendered it — to correct, modify or suspend it. Ituyghe vs. Brinkman, 38 Ann. p. 843.
11th. AIL the taxpaying inliabitauts are. privies to all judgments rendered for or against the City of New Orleans. They bear the onus and are entitled to the benefit of all such judgments, as the estoppel of res adjudicata is necessarily mutual. Barker vs. Scogin, 1J Ann. 629 ; Xiquos vs. Bujac, 7 Ann, 498.
12th. The3 are, therefore, entitled in a ease of this kind, were they are vindicating tlio public rights, to avail themselves of the plea which the corporation could in any action by or against it lawfully set up.
J. 11. Bcehwilh, II. II. Hall and (I. A. Hreaux, lor Defendants and Appellants:
Every municipal corporation lias all tlio power of administration of local municipal affairs expressly granted in its charter, and all incidental powers necessary to carry such powers into execution and effect and operation. Dillon on Mun. Cor., third edition, see. 94, vol. 1, 121; Railroad, vs.J Evansville, 18 Wis. 82; ?Slack vs. Railroad Co., Ji. Mon. 1; Birdgeport vs. Railroad Co., 15 Conn. 475, 501; Cases cited in note, third edition, Dillon on Mun, Cor. vol. 1, p. 121.
A municipal corporation, with power to sue and he sued, has authority to settle its contentions hy compromise. This right also grows out of its authority to create debts and incur liabilities. Dillon oil Mun. Corp., sec.. 398 ; Beau vs. .Jay, 23 Maine, 117, 121; Meec.h vs. Buffalo, 29 N.Y. 198; Baileyville vs. Lowell, 20 Maine, 178; Nelson vs. Milford, 7 Pick. 18; Augusta vs. Leadbeater, 16 Maine,'45; People vs. Supervisors, 27 Cal. 655; People vs. Cooil, 25 Cal. 648; Molville vs. Dixliold, 30 Maine, 157; Petersburg vs. Maffin, 14 111. 193; Taylor on Corp. 137 ; Oglesby vs. Attrill, 105 U. S. 005 ; St. Louis vs. United States, 92 U. S. 462; Oliver vs. Worcester, 102 Miiss. 489; Board of Liquidation vs. Railroad Co., 109 U. S. 221; Buffalo vs. Bettinger, 70 N. M. 393.
A municipal corporation, having the powers conferred on it in the form and to the extent conferred on the city of How Orleans by its charter of 1882, particularly in the seventh section tlioreof. and also having a general authority to make all contracts necessary for the health, safety and welfare of the city, may contract for waterworks. Cabot vs. Rome, 28 Ga. 50 ; Wells vs. Atlanta, 43 Ga. 67 ; Livingston vs. Pippin, 31 Ala, 542; City of Vincennes vs. Callender, 86 Ind. 484.
To authorize a taxpayer to stand as x>laintiff in a suit having for its object the rescission of a contract made by a municipal corporation, the jdaintiff must not only show that he is a taxpayer, but. set forth and disclose in his petition a state of facts which, if true, render the contract assailed absolutely void, not simply voidable. People vs. Mayor, etc., of Brooklyn. 4 Comst. 419; Dillon on M. C., sec. 55; Spaulding vs. Lowell, 23 Pick. 71; Hodge vs. Buffalo, 2 Denio, 110; Smith vs. Madison 7 Ind. 86; Kyle vs. Malin, 7 Ind. 34-37 ; Livingston vs. Pippin, 31 Ala. 515 ; Mayor vs. Cabot, 28 Ga. Rep. 50 : ells vs. Atlanta, 43 Ga. Rep. 76: City of Vincennes vs. Callender, 86 Ind. 494; Valparaiso vs. Gardner, 97 Ind. 2 ; Jones vs. Richmond, 18 Grattan. Va. 517 ; Smith vs. Richmond, 15 Wall. 429; Willard vs. Hewburyport, 12 Pick. 229 ; Kelsey \ s. King. 1 Trans. App. 133.
Where there is a coiporato body in existence with niunicii>al and i>olibieal powers, the nnmicix>al name and authority is adequate to perform all functions relating to enforcing the ordinances and maintaining the rights of the corporation. There must be inability or refusal to perform that duty and functions before the duty can he either assumed or performed by volunteers. Russell vs. Wakefield Waterworks Co., L. R. 20 Eq. 479; Gray vs. Lewis. L. R. 8 Oh. 1035, Hersee vs. Vesey, 24 Maine 9 ; Lafmo vs. Deems, 81 H. V. 507.
To authorize courts to reverse the legislative decision manifested by the x>assage of an act as to what is a city purpose, the case must he one conclusively showing an underlying purl>ose different from municipal use and convenience. Re Apxfleton vs. Mayor. 90 H. Y. 569 ; Brooklyn Bridge Case — Peojde vs. Kelley, 76 H. Y. 475; Matter of Lands in the Town of Fiatbusli, 60 H. Y. 398.
Where the law or charter confers upon the City Council or local Legislative power to determine ivpon the expediency or necessity of measures relating to the local government, their judgment upon matters thus committed to them while acting within the scoi>e of their authority, cannot ho controlled by the courts. Dülon on Mun. Coip., third edition, vol. 1, 121; Baker vs. Boston, 12 Pick. 184; Honey vs. Mayo, 41 Maine 322; Parks vs. Boston, 8 Pick. 243 ; Fay, ex parte, 15 Pick. 243 ; Donnelly vs. Oabaniss, 52 Ga. 211; Sheridan vs. Colvin, 78 111. 327; Motz vs. Detroit, 18 Mich. 495-516; Bond vs. Mayor of Hewark, 18 H. J. Eq. Rex>. 376; Rittenliouse vs Mayor of Baltimore, 25Md. 336; Jones vs. Richmond, 18 Gratt. 917.
The motives or busiuess prudence of anybody vested with legislative capacity, cannot he enquired into by the courts. Dillon on Mun. Coip., third edition, vol. 1, p.326 ; Baird vs. New York, 96 H. Y. 567, 580, 581; Peoxile vs. Albertson, 55 H. Y. 50; People vs. Draper, 55 H. Y, 532: Mayor vs. Bank, 111 H. Y. 446-458 ; Wells vs. Atlanta, 43 Ga. 67 ; Ex parte Delaney, 43 Cal. 478,
A municipal corporation cannot relieve itself of its contract obligations, or refuse to perform a contract made by its officers or agents, because sucli officers or agents have been unfaithful in other matters. Baird vs. Mayor of New York, 96 K. Y. 567 (one of the Tweed cases).
Any consideration that will make a valuable consideration for a contract between idividuals. will constitute a valid consideration in a contract by or with a municipal corporation. A moral obligation alone is sufficient to support a promise of a munndpal corporation, if sufficient to support a promise, if the same state of things existed between individuals. Gilford vs. Supervisors, 13 H. Y. (3 Kern) 149; Same ease, 34 Wend, and 18 Barb., 615; Dillon on Mun. Cor., sec. 44; Brewster vs Syracuse. 19 H. Y. 116; People vs. Mayor, etc., of Brooklyn, 4 Comst. 419; Thomas vs Leland, 24 Wend. 65; Slielby County vs. Railroad Company, 5 Bush. (Ky.) 225; Philadelphia vs. Field, 58 Pa. St. 320 ; Coolly on Constitutional Limitations, 380, 491; Blanding vs. Bun-, 13 Cal. 343 ; People vs. Onondaga, 16 Micli. 254; Lycoming vs. Union, 15 Pa. St. 166 ; Nelson vs. Milford, 7 Pick. 18; Pike vs. Middleton, 12 N. H. 281; Briggs vs. Wlupple, 6 Vt. 95; Mayor vs. Tenth National Bank, 111 N. Y. 446, 449; Brown vs. Mayor, 63 N. Y. 164.
All of the guarantees and compacts contained in the charter of the Waterworks Company are guaranteed against impairment and destruction by the Federal constitution. New Orleans Waterworks vs. Iiivers, 115 U. S. 674; New Orleans vs. St. Tammany, 120 U. S. 64; New Orleans Gas Co. vs. N. O. L. & Ih Co., 115 U. S. 650; Fiske vs. Police Jury, 111 U. S. 716 ; Louisiana vs Pilsbury, 105 U. S. 278; Gordon vs. Appeal Court, 3 How. 133 ; McGehee vs. Mathis, 4 Wall. 143; Dodge vs. Wolsoy, 18 How. 331; St. Anna Asylum, 105 U. S. 362; Louisiana vs. St. Martin, 111 U. S. 716 ; Home of the Friendless vs. Rouse, 8 Wall. 430.
An estoppel is an admission, or something which the law treats as equivalent to an admission, of a high and conclusive nature — so high and so conclusive that the party whom it affects is not permitted to aver against it, or offer evidence to controvert it, and binds not only the party, but all the privies. 2 Smith’s Leading Cases, 580, and notes on Duchess of Kingston’s case; 1 Herman on Estop., 350. '
Privies bound by estoppel are, first, privies in blood; second, privies in law: third, privies by estate. The taxpayers, plaintiffs in this suit, are privies both in law and estate. They are pndvies quoad the city of New Orleans, because they are titoms of the corporation, whose officers are their special agents in all matters of municipal administration; privies in estate, in that the alleged remedial action sought by them is simply alleged pecuniary advantage to and for the city of Now Orleans as a political coiqioratiou aggregate. 2 Smith’s Leading Cases (Note on Duchess of Kingston’s case). 587-589, et seq.; 1 Herman on Estoppel, ed. 1886, 149, et seq.; 1 Dillon on Muu. Cor., p. 316 and sec,. 90, 91.
If a> party to a contract desires to rescind on the ground of fraud or mistake, he must, upon the discovery of the fact, at once annouee his purpose, and adhere to it. If he is silent, and treats the contract as valid, he waives his objections, and is as conclusively bound by the contract as if the mistake or fraud had not occurred. He is estopped by election.
If he has the right to repudiate or affirm the transaction, and affirms it, he cannot afterwards resort to his right of repudiation. Hermán on Estoppel, ed. 1886 vol. 2 p. 1171, 1172; Grymes vs. Saunders, 93 U. S. 55; Thomas vs. Barsfcow. 48 N. Y. 200 ; Flint vs. Wood, 9 Hare 622; Jennings vs. Broughton, 5 De G. M. and G. 139 ; Loyd vs. Brewster, 4 Baige, 537; Railroad Co. vs. Rowe, 24 Wend. 74; Minturii vs. Main, 7 N. Y. 220; Wroten vs. Armat, 31 Graft, 228; Frinck vs. Hollander, 35 Ann. 582; Trustees vs. Sterret-t, 31 Ann. 719; O’Keefe vs. Handy, 31 Ann. 832; Lippmins vs. McCranie, 30 La. Ann. 1251; Byrne vs. National Bank, 31 Ann. 81; Insurance Company vs. DeBlanc, 31 Ann. 300 ; School Directors vs. Hernandez, 31 Ann. 158; Levee Company vs. State, 31 Ann. 250; Hardee vs. Turner, 31 Ann. 469; Hood vs. Frelsen, 31 Ann. 577; In Re. Mechanics’ Society, 31 Ann. 627; Succession of Fluker, 32 Ann. 292; Hart vs. Huguet, 33 Ann. 362; Bank vs. Wagner, 33Ann.782; Dickson vs. Dickson, 33 Ann. 1370 ; Succession of Hoss, 33 Ann. 1256; Maguire vs. Maguire, 40 Ann. 578.
A party to a suit cannot, injudicial proceedings, allege one state of facts as a cause of action or defence, and in the same .suit, or in a suit about the same controversy or thing, between the same parties, set up and plead a state of facts so contrary and inconsistent, that, if one plea or allegation is true, the other is necessarily false. Walker vs. Walker, 37 Ann. 107; Gaudet vs. Gautlireaux, 40 Ann. 186 ; State vs. Judges, etc., 34 Aun. 1220 ; Brandon vs. Allen, 28 Ann. 60; State vs.Board of Liquidation, 28 Ann. 121; Bender vs. Belknap, 23 Ann. 764; Serritt vs. Labouse, 15 Ann. 186; Osborne vs. Legras, 29 Ann. 293.
The doctrine of estoppel applies to the State and municipal corporations, as well as to private citizens or individuals. State vs. Ober, 34 Ann. 559 ; State vs. Taylor, 28 Ann. 460 ; Moore vs. New Orleans, 32 Ann. 726 .
Garleton Sunt, City Attorney, and W. B. Summerville, Assistant City Attorney for the City of New Oideans, Defendant and Appellant:
The City of New Orleans will not be held responsible for tlie errors of its agents in pleading or defending different suits. Millaudon vs. The First Municipality of New Orleans 1 Ann. 215; Delabigarre vs. Second Municipality, 3 Ann. 235, 236; Brown vs. Police Jury, 4 Ann. 189; Benham vs. Parish of Carroll, 28 Ann. 343.
When au act is ultra vires on the part of the corporation of the City' of New Orleans, no act of the city will have the effect to estop it to allege its want of power. Bigelow on Estoppel, 4 Edition, page 530 ; Dillon on Municipal Corporation, vol. 1, page 450, section 457; South Ottawa vs. Perkins, 94 XT. S. page 261; Anthony vs. County of Jasper 101 XT. S. 697.
Act No. 33 of 1877, known as tli« charter of the New Orleans Waterworks Company, as .judicially interpreted by the Supreme Court in City of New Orleans vs. New Orleans Water Works Company, 36 Ann. 482, is binding upon the company and the city. Act 56 of 1884, is unconstitutional, null and void, and ordinance No. 909, C. S. and the contract thereunder of Oct. 3, 1884, purporting to be in pursuance of Act 56 of 1884, are in fraud of the rights of the city, and are likewise null and void.
This case is pending before the Supreme Court of the United States on a writ of error.

Opinion:
Tiie opinion of the Court was delivered by
McEnery, J.
Ed. Couery and other taxpayers, residents of the City of New Orleans, brought suit against the New Orleansj Water Works Company and tlie City of New Orleans, to have tlie existing contract for the supply of water to tlie corporation, to be declared a nullity.
They aver they are taxpayers of New Orleans in amounts aggregating ten thousand dollars. They recite the history of the present charter, tlie litigation growing out of the city's attempt to subject the propei'ty of the corporation to taxation and the judgment in the case of the City of New Orleans vs. the Water Works Company, reported in 36 Ann. p. 432-, and that the Supreme Court interpreted tlie legislative contract contained in Act. 33, of 1877, which is the charter of said company, and that the Water Works Company had no.power to receive from the city any greater amount for a free supply of water than the sum of'$11,484 87, allowed the company on its reconventional demand in that suit, as an equivalent.
They allege the city had no authority to make the contract, that the contract is ultra vires, mill and void, illegal and unconstitutional.
They also aver that after the termination of the suit of New Orleans vs. Water Works Company, the company not satisfied with the judicial construction placed upon its charter, in order to obtain an unjust advantage over the city, procured the enactment of Act. 56, of 1884, and that pretending to act under this statute the City Council of New Orleans passed ordinance, No. 999, authorizing the Mayor of said city to euter into a contract with the Water Works Company, and that said ordinance 909, and the contract made in pursuance thereof were not author ized by the terms of Act 56, of 1884, and that the legislature never intended that the contract relations as interpreted by the Supreme Court should be changed or modified unless for the purpose of furnishing the city with clear and filtered water; that if said act contemplated a contract between the City of New Orlans and the Water Works Company as to the value of the water to be supplied, then said act is unconstitutional and void and conflicts with Articles 45, 57, 234 and 46 of the Constitution of the State.
Tire petition prays for an injunction.
The City of New Orleans filed an exception to the petition (1) that the plaintiff's petition disclosed no legal cause of action, (2) that the plaintiff's disclosed no interest or authority to institute and maintain the suit and prayed that it be dismissed. Some years after this exception was filed on a change of the city administration, the attorney of the city appeared and joined the plaintiffs in their suit. Complaint is made of this change of front on the part of the city and it is alleged that the city is estopped from filing a contrary plea. While this may be true as to the city in its corporate or political capacity, it can not operate against the plaintiffs taxpayers, who allege the nullity of the contract.
The company also filed an exception alleging several grounds for the dismissal of the suit, some, of which are identical with the exception filed by the city. But they are-so intimately associated with the merits of the case that we will not disturb the order of the District Judge in overruling the exceptions.
The Water Works Company filed au answer pleading a general denial, and also a supplemental answer alleging other matter, all of which, however, is summed up in maintaining the integrity of the contract, the authority of the city to make the contract, independent of Act 56, of 1884, and the constitutionality of said act, and the validity of ordinance 909, and the contract made in pursuance thereof.
There was a judgment in favor of the plaintiffs and the Waterworks Company luis appealed.
The City of New Orleans purchased from the. Commercial Bank, the Water Works'property and franchises. The city undertook to supply tho inhabitants of the city, and her own wants with water. The experiment was disastrous, and her experiment was that of all great municipal corporations which have attempted this scheme — an insufficient supply of water, debt, through extravagant and bad management, and complaints from her citizens. To rid herself of this incumbrance, the city appealed to the legislature for relief, and at her instance and in answer to her prayer the present company was organized under the direction of her officers in pursuance of Act 33 E. S., of 1877. Section II of that act is as follows:
"Do it further enacted, etc,, That the City of New Orleans shall be allowed to use water from the pipes and plugs of said company now laid, or hereafter to be laid, free of any charge, for the extinguishment of fires, cleansing of the streets, and for the use of all public buildings, public markets and charitable institutions, aud that the said company shall place, free of any charge, whatever, two hydrants of the most approved construction-in front of each square, where a main pipe shall be laid at a suitable distance from each other, from which a sufficient quantity of water may be conveniently drawn for the extinguishment of fires, for watering the streets and cleansing the gutters, and for any other public purpose; that on the squares which do not front on the river the hydrants shall be placed on opposite sides of the streets, at an equal distance from each other and the corners. It shall be the duty of the said company, whenever main pipes shall be laid, to supply water for all the purposes herein mentioned at all times during the continuance of this charter; and in consideration thereof the franchises and property of said New Orleans Water Works Company, used in accordance with this act, shall be exempt from taxation — State, municipal and parochial."
For several years the company supplied the city with water, and no tax was demanded from the company. In 1881 the city brought suit against the company for taxes assessed against the company, amounting to $11,484 87.
The company claimed that if it had to pay the tax the city was bound to pay for the amount of water supplied under the above section, and reconvened for the sum of $40,281 87.
There was judgment for the taxes due the city and in favor of the company on the reconventional demand for the exact amount of the taxes, as equivalent for the water already furnished the city. City of New Orleans vs. Water Works Company, 36 Ann. p. 432.
It is contended by plaintiffs that the decree in this case fixed and determined the respective obligations of the city of New Orleans and the Waterworks Company, and regulated the future supply of water to the city, and the amount which the city should pay annually for its supply of water, the amount of taxes assessed against the company as fixed in said suit. In this case the sole question was whether or not the property of the company was exempt from taxation, and it involved the determination whether or not section 11 of Act 33 of 1877 was void, as being in conflict with the constitution of 1868.
Under the issues presented the court could not interpret the legislative contract or charter of the company in its entirety, because the only question was as to the validity of one section of the act. It found, up to the date of the suit, an executed contract to deal with, the consideration of which was illegal. It declared the illegality of the consideration, and ordered the amount paid on account of it, to be returned to the party who had paid his part of the obligation.
The contract with the city was that for furnishing water without specifying the amount, the city would not collect taxes from the company. The company furnished the water, and the city refused to allow the tax. Tiie judgment annulled the contract and. returned to the Water Works Company the value of the water which it had furnished, and which had been fixed in the contract annulled at $11,484 87, as the only consideration for exemption from city taxes.
To say that the decision in that case regulated the contract of the parties in the future, as to the price of the water to bo furnished by the Water Works Company, would be to maintain that this court has made a contract for the parties which they never intended, and which is not warranted by any provisions in the Water Works Company's charter.
The contract between the city and the Waterworks Company was made directly by the State at the solicitation of the city. The State withdrew the privilege of exemption from State taxation, which in amount equalled the city taxes. Thus one-half of the consideration was withdrawn by the State without giving any equivalent. To have fixed the price of the water to be furnished at the exact amount allowed the company on its reconventional demand would have been unjust. The company now pays in taxes twice the amount found to be due on the reconveutional demand. If the increase has been so great in so short a time, it is reasonable to suppose that the increase will be in greater ratio in the future with the acquisition of additional property by the company, the increase in the value of its present property with the improvement and advancement in the commercial prosperity of the city, which is so confidently predicted and expected. Prom this it will appear how inequitable it would have been liad the decree arbitrarily fixed an amount to be paid by the city for her Avater supply. It would haA^e been an amount never contemplated by the Legislature AAdien it made the contract for the city AA'ith the company.
The effect of the judgment in that case was to destroy and annul section 11 of Act 88 of 1877, E. S. One may look in vain in another paragraph or section of the act for any obligation, express or implied, which compels the Water Works Company to furnish free water to the city for any franchise or privilege granted by the State.
The Water Works Company was organized at the instance and invitation of the city, and by arithority of law. The city cannot impose any obligation upon it contrary to the original grant, without its consent. To impose upon it an onerous duty not contained in its charter, would be a violation of the State and Federal constitution. There is no provision in its charter requiring it to furnish water to the city at any stipulated or regulated price.
In the case of City of New Orleans vs. T. T. Company, 40 Ann. page 42, there was almost a-similar state of facts. The city had by grant induced a telephone company to establish an expensive plant, and gave it certain privileges to erect its jioles. Afterwards she attempted in certain localities to put a charge upon 600 of defendant's poles at $5 per pole. There was judgment for the company, this court deciding that the company was protected by the constitutional right against the impairment of its contract. In the instant case the city promoted the organization of the Water Works Company, and now seeks to impose upon it an obligation not warranted by its charter. "Obviously," said .the court, in the telephone case, "upon the clearest consideration of law and justice, the grant of authority to defendant, when accepted and acted upon, became an irrevocable contract and the city is powerless to set it aside or to interpolate new and more onerous considerations therein. Such has been the well recognized doctrine since the Dartmouth College case, 4 Wheat. 518." In this case we have affirmed the principles resting upon tire Dartmouth College case, under wliich corporations have protected their rights and franchises, the title to and uses of property, safely from any alteration or impairment of their rights, and freedom from increased public burdens. It has become fixed in jurisprudence by repeated affirmations for over sixty-five years, and has become venerable because announced and maintained during this period by the highest judicial.tribunal in the land through a succession of judges eminent for learning and purity of character. It-will not yield to a persistent local popular clamor, and will not be reversed to satisfy local prejudice and sentiment.
In Binghamton Bridge, 3 Wall. 73, Justice Davis said: "The security of property rests upon it, and every successful enterprise is undertaken in the unshaken belief that it will never be forsaken. A departure from it now would involve dangers to society not to be foreseen, would shock the sense of justice of the country, and weaken, if not destroy, the respect which lias always been felt for the judicial department of the government."
To place the construction upon the decree in tlio case of the City vs. Water Works Company, 36 Ann. p. 482, contended for by plaintiff, would be to impose an obligation upon the company, not warranted by its charter and would be in violation of both the State and Federal Constitution.
It will be unnecessary to go into tlie specific details of tlie existing contract of the city with the Water Works Company. If tlie city had the power to make the contractj and confined herself within the limits of the power, the quantity and kind of water, the price, etc., were matters within the legislative discretion of the. Citjr Council, and unless there is fraud in the execution of the contract, courts will not inquire into this discretion. Dillon on Municipal Corps. Vol. 1, p. 121. Atlantic City Water Works Co. vs Reed, N. Y., 115 Ann. 10. 31 Ala. Rep. 545. 97 Ind. Re. p. 2.
When the Common Council of a municipal corporation is vested with full power over a subject and the mode of the exercise of such power is not limited by the charter it may exercise it in any manner most convenient. (Or.) R. P. 835.
And when a municipality has power under its charter from the legislature to obtain a supply of water for fire and domestic purposes it will not be enjoined from levying a tax to increase its supply when it is alleged to be ample, tlie extent of tlie use of sucli power rests in its discretion and the question of expediency is for tlie municipality and not for tlie courts. Lucia vs. Village of Montpelier, (Vt.) Ann. 321.
In tlie case of Handy et als. vs. City of New Orleans, 39 Ann. 107, tliis court said:
"Tlie serious charge is after all, tliat tlie city in tlie exercise of tlie police power lias m aladininistered the public tiling respecting tlie lease of her wharves. Under such circumstances can the petitioners he heard ?
"If it could be questioned whether tlie city in tlie exercise of tlie piolice power which is inherent in all municipal corporations, could build and keep wharves and exact compensation for the use of the facilities.desired from [them by those enjoying the same; or convey and transfer unto another that right all discussion on the subject would be at once hushed by tlie positive and express delegation of authority in that respect made to the city by the sovereign in the charter under which it breathes, moves and acts.
" It is apparent that the city was formally vested by the legislature with the power of administering by herself or by the agency of others the wharves and landings dedicated to commerce.
" There can be no doubt, then, that what the city has done in this regard in the exercise of the police power can no more be questioned than if the State herself had acted directly."
In approving the doctrine expressed in Municipality vs. Peace, the court said: "the correctness of the ruling and the soundness of the views therein are not questioned, but the material fact on which the same rests must not be lost sight of." The fact referred to by the court was that in the power delegated to the municipality there was no restraint imposed upon its discretionary use and in the language in Municipality vs. Peace: the remedy for this can be had elsewhere than from the judicial power" — in the intelligent exercise of electoral power directed to legislative action to compel the municipality to confine itself with fixed limits.
The case of Handy vs. New Orleans was remanded to be tried on the merits solely, because the corporation of New Orleans had transgressed the mandatory prohibition of its charter.
In the opinion the court said: " Courts in passing upon such matters ought to do so with great caution and due regard to the legal discretion which the sovereign may have vested in such corporations."
The cause for which tax payers can attack the acts of the municipality are succinctly and well defined in this ease. Handy et als. vs. New Orleans, 39 Ann. 107.
It is not therefore every contract, nor the details of contracts involving the exercise of vested discretion in the municipality that can be attacked by the tax payers, outside of and independent of the civil corporation.
To authorize such a cause would be to put an end to organized local government and to vest the powers of municipal government in the hands of every irresponsible self-constituted committee, noisy demagogues and professional tax resisters.
Under such a system there could be no progress, improvement or advancement; there would be no well paved streets, and proper sewerage, or the inauguration of effective sanitary methods.
Every act, contract, and every exercise of legal discretion would invariably be brought up for judicial investigation. Delay and disorder would follow in the track of fruitless litigation.
There is no proof in the record of any fraud, or undue advantage obtained by the Water Works Company over the city. The motives which prompted the members of the legislature to pass Act 56, and of the members of the council in passing ordinance, No. 909, are beyond our power to investigate. Dillon on Municipal Corp., Vol. 1, p. 326, Baird vs. Mayor, 96 N. Y. 567. Villovasso vs. Borthel, 39 Ann. 247.
The only questions presented for consideration, therefore, are " did the City of New Orleans have the power to make the contract, and if she had the power has she exceeded any restraints imposed upon her ? And these will involve an inquiry into the power of the city in the exercise of its police powers to make the contract and to the constitutionality of Act 56, of 1884, and the validty of ordinance No. 909, and the legality of the contract.
A municipal corporation possesses and can exercise the following powers: 1. Those granted in express words in its charter. 2. Those necessarily and fairly implied in or incident to the powers expressly granted. 3. Those essential to the declared objects and purposes of the corporation not simply convenient but indispensable. 1 Dill. Mun. Corp., Sec. 89.
Among the declared objects for which the corporation of the City of New Orleans was created were to'maintain the health and cleanliness of the city, and to provide for the extinguishment of fires. City charter, Act 20, of 1882, Sec. 7.
A supply of water is essential and indispensable to accomplish these objects.
The limit to the exercise of this power must be that the regulations have reference to the comfort, safety or welfare of society; and these rights of police regulation insured to municipal corporation by their charter may be from time to time, subject to new regulations by the State with a view to the protection of the public safety, morals and health, provided the corporation is not deprived by such new regulations of any of its essential rights and privileges. Cooly Cons. Lim. 148, 718.
In the exercise of this right in their proprietary or private character, as distinguished from their public character in their responsibility to the State as part of the machinery of government, municipal corporations do so, not from consideration of State, but for the private advantage of the particular corporation as a distinct legal personality. And as to the exercise of such powers, and property acquired thereby, and contracts made in reference thereto they are to be considered as quo ad hoe, private corporation. Dill. Mun. Corp., Sec. 66.
The City of New Orleans by virtue of her inherent police powers then had a right to contract with reference to a water supply for the public health, and to extinguish fires. And having the right and having made the contract, her responsibility is to be measured like that of an individual or any civil or business corporation.
The corporation of New Orleans is not, as urged in argument, the ward of the courts. Her contracts can not be annulled, except for the same causes that the contracts of agents and fiduciaries and persons of full age and capacitated may be declared void; that is only when she exceeds her legal authority as trustee of the people, or there is some fraud either direct, or by implication in extravagant and corrupt administration in which the beneficiaries in the contract were either actively or constructively parties, or for some of the causes specified in Handy vs. New Orleans, 39 Ann. 107.
In making the contract now attacked, did the city of New Orleans exceed any limitation placed upon her in the exercise of her police powers ? Her charter is silent as to any restriction. In it there is no regulation of any price as to the water to bo supplied, nor is there any restriction as to the quantity or the character of the water.
Act 56 of 1884 authorizes the city to contract for either clear or filtered water, and gives the city full discretion as to the price, terms and conditions. The only restriction which could operate upon the contract is that contained in section 15 of the charter of the Water Works Company, which prohibits it from fixing the price of water so that its net proceeds shall exceed ten por cent per annum. It is not alleged or shown that the net proceed of the sale of water exceeds this limit.
This court ha's said that "where a municipal corporation is authorized to impose a wharfage tax as a compensation for keeping the wharves in a proper condition for the safe and expeditious shipping and landing of merchandise, a court will not undertake to fix a limit to the amount which the municipal authorities may exact for that purpose. The question of the extent to which this right may be exercised is purely administrative." Municipality vs. Pease, 2 Ann. 538.
And in the instant case the city of New Orleans had full power to contract, without restraint as to price, quantity or kind of water, and we are not disposed to question the administrative discretion vested in the city in this respect. 28 Ga. Rep. 50; Wells vs. Atlanta, 43 Ga. 76; Watson vs. Turnbull, 34 Ann. 856; Pickles vs. Dry Dock Company, 38 Ann. 412.
We are of the oqfinion that, independent of any statutory provision subsequently enacted authorizing the city to contract for her water sup-' ply, that she had full and plenary power to do so under the provisions of her charter.
It is alleged, however, in plaintiff's petition, that the power of the city to make the contract flows from the provisions of Act 56 of 1884, and for certain alleged vices in the act it is unconstitutional and void, and conferred no authority on the city to make the contract.
The unconstitutionality of the act is not to be implied. The court, if possible, will give the statute effect unless it is clearly unconstitutional. Nicholls, Governor, vs. Shakespeare, Mayor, 41 Ann. 156.
It is alleged that the act is unconstitutional and violates act 29, which says every law enacted by the General Assembly shall embrace but one object, and that be expressed in its title.
The act is entitled "An act to provide for the supply of water to the city of New Orleans by the New Orleans Water Works Company in cases of the municipal taxation of said company; to authorize provision to be made for the payment of water supplied and to be supplied; to provide for a clear or Altered supply of water by the New Orleans Waterworks Company, and to enable the city of New Orleans to contract for the same, and to regulate the qiayment of taxes imposed on said company, contrary to the exemptions given in its charter, and to put into effect section 11 of Act 33 of of 1877, extra session, in instances of refusing or contrary to the exemption thereon."
It is evident that the title of the act embraces but one object, the supply of water to the city of New Orleans, and authorizes the city to make provisions for the payment of the water, and indicates the object and puiposes of the act. Every subdivision of the title relates to and is intimately associated with the object of the act. There is no other object expressed or intimated in the title of the act than the main object of supplying the city with water and paying for it.
The sections of the act are directly responsive to the title, and are germain and related to each other.
No section of the act contains any object different from the one object embraced in the title. Edwards vs. Police Jury, 39 Ann. 855.
The act does not violate Art. 57, because it does not grant an extra compensation to the Water Works Company. . There was no obligation on the company to supply the city with water at any price, or any quantity.
The city owed the company for no service for which extra compensation was granted. Nor does the act conflict with Art. 46, as the act does not in any way alter or amend the charter of the company. The act authorizes the city to contract and designates the Water Works Company as the party with whom it may enter into the contract. There is no privilege granted to the company. It was not authorized to do any act which it could not already do by its charter. And as the charter of the company was not amended, renewed, extended or explained by the act it does not conflict with Art. 234. Act. 56, affects the City of New Orleans in authorizing it to do a certain act, to make a contract, with a corporation. The provision in Art. 46, says that the article shall not apply to the City of New Orleans. To place the construction on the act contended for by plaintiff, would deprive every corporation of its vested rights with which the legislature should authorize the city to contract.
It is difficult to see in what manner the act is repugnant to act 57, as there was no debt due by the Water Works Company to the city which was extinguished or released, or which was authorized to be extinguished or released by said act.
City ordinance 909 is entitled " an ordinance to carry out the Act No. 56 of 1884, providing for a future water supply from the New Orleans Water Works Company, to and for the city of New Orleans and certain institutions, and regulating the use of water and the payment therefor.'
The ordinance regulates the amount of the supply of water, and fixes the price at $60 per annum for every fire plug, fire hydrant, and fire well, to continue during the existence of the Water Works Company's charter.
The contract made in pursuance of this ordinance makes it 'a part of the contract, and is a substantial repetition of it.
Act 56 was permissive in its character, and could not have effect except upon certain conditions which were under the control of the city. It was optional with the city to'make a contract of the kind under consideration with the Water Works Company. If the city had the power to contract and executed a contract in pursuance of that power, no individual taxpayers, if the city kept within the extent of her powers, can question the exercise of that power and set aside the action of the City Council authorizing a contract within its legal discretion.
There were no contractual relations between the city and the Water Works Company for supplying the city with water for the purpose of extinguishing fires, cleansing the gutters, and supplying the public schools, markets, and public institutions. The city and the Water Works Company were free from obligation to each other, and each had the capacity to contract for said purposes.
In making the contract to furnish the city with water with the Water Works Company, all the requisites necessary to the validity of a contract were complied with. 1. The legal capacity of the parties to make the contract. 2. Their consent legally given. 3. A certain object which formed the matter of agreement, and 4. A lawful purpose. R. C. C. 1779.
To set aside the contract, then, there must be error of fact or of law, fraud, violence or threats. R. C. C. 1819.
Not any one of these essentials to the illegality of the crontract is proved.
It is said by counsel for plaintiffs, that "If we had nothing before us but the charter of the city and the charter of the Water Works with the 11th section out, there would be some ground to defend a contract of this kind; but as long as that 11th section is in force (and it will be in force for fifty years) the Legislature has covered by positive enactment the whole subject of a public water supply for this city, and the powers of the city in reference thereto are necessarily in abeyance."
The effect of the judgment in the case of New Orleans vs. Water Works Company, 36 Ann. 432, was to annul and eliminate said section from the charter. It was the section which provided for a supply of water to the city.
No other section provides for said supply of water, and the section expressly says that " it shall be the duty of said company whenever main pipes shall be laid to supply water for all the purposes herein mentioned at all times during the continuance of this charter; and in consideration thereof the franchises and property of said New Orleans Water Works Company, used in accordance with this act, shall be exempt from taxation — State, municipal and parochial." There was but one agreement to furnish water for any one consideration in the section, the exemption from taxation, and this by said decreed in the case referred to was declared illegal, and the whole section was annulled. There was not a partial failure of consideration, but a total and entire failure because of its illegality. R. C. 2031; City vs. Sugar Shed Co., 35 Ann. p. 551.
The city of New Orleans cannot repudiate the consideration which she was to pay, and claim all the benefits in her favor.
As a general rule a judgment rendered by a court of competent jurisdiction directly upon a point at issue is a bar between the parties. As we have previously stated, the only point at issue in the case of the City vs. Water Works Company, 36 Ann., was the exemption from taxation of the property of the company, the legality of section 11 of the charter, and the amount to be restored to the company, which it had paid on the annulled contract. Section 11 was the only section of the charter directly at issue. ' "
" But there must be an identity of parties, of capacity, of object and of cause of action. One of these is lacking here." Collens vs. Jumel, Auditor, 30 Ann. p. 863.
There is no question presented in this case of the exemption of the Water Works Company from taxation, nor is the amount allowed said company on its reconventional demand at issue. There is no fact which was at issue in the case of City vs. Water Works Company referred to in the instant suit.
The matter at issue in the instant case is as to the authority of the city to make the contract now existing between the city and the Water Works Company, the constitutionality of Act 56 of 1884, and the validity of the contract made in pursuance thereof. It is not doubted if Act 56 is constitutional, and the contract is within the legislative permission, tha it is a valid contract.
If the opinion in the case of New Orleans vs. Water Works Company, 36 Ann. 432, interpreted the legislative contract, in the charter of the company, with the city of Now Orleans, this certainly did not prevent the Legislature from authorizing the city to make another contract.
The new contract for a water supply differs in many respects from that which was in section 11 of the company's charter.
The preamble to the act 56, authorizing the city to contract with the Water Works Company*- recites the reason for its enactment. The State in the exercise of her sovereignty had the undoubted right to act in the matter of the authorization of the city to contract for the purposes embodied in the act. Nicholls, Governor, vs. Shakespeare, Mayor, 41 Ann. 156.
The Legislature having' the power to authorize the City Council to enact ordinance 909, the ordinance has the effect of an enactment of the Legislature. Roderick vs. Whitson, 4 N. Y. S. 112. It is difficult to understand in what manner the decree in case of City vs. Water Works Company could estop the Legislature from making such laws as it deemed necessary for the welfare of the city in authorizing her to make a contract.
The city, like a person, having the power to do so, can alter, change, or abrogate her contracts with the consent of the other contracting-party.
Therefore, if the city and the Water Works Company's relations were established by said decree, they could, with legislative consent, make another and a different contract.
The city was getting her water supply for the price of the amount of taxes due her by the company. In the exercise of her prerogative she had the contract annulled. That in a new contract she has fixed a different price for her water is a. matter which concerns her in the exercise of her administrative functions. It was her own choice, her own act of administration, and we are not called upon to either commend o' condemn tlie exercise of tliis discretion.
The city does not donate the price of the water as fixed in the contract to the Water Works Company. The city uses one-third of the entire amount of water pumped by the company. Edwards' Report shows that the value of the water used by the city when she operated the Water Works amounted to $90,000. The pressure was then fifteen feet; now it is fifty feet, consequently there is a greater supply now' than when the city used the plant and operated it, and the city pays now $24,000 loss than the valuation at that time. It does not appear that the city pays more for her water supply than any other consumer. The fact is she pays less and gets her water at reduced rates.
To an impartial mind there can be no doubt that the city has reaped great advantages from the operation of the Water Works by the present company. A large floating and bonded debt has been extinguished, aggregating one million five hundred and sixteen thousand dollars. The city is saved an annual deficit and owns shares in the company valued at over a quarter of a million of dollars, which it is probable will increase in value, and from which she derives a revenue. She also receives a large and increasing amount from a tax on the property of the company''.
These advantages resulting to the city from the charter granted to the company would appear to be sufficient for the exclusive privilege for a term of years of furnishing water to the inhabitants of the city.
The privileges granted to the company can scarcely be called a monopoly, because it is doubtful if the city could have induced any company to undertake the responsibility of furnishing the city without at least a guarantee of some protection, not against competition, but against annoyances from irresponsible companies whose existence would pass away on the payment of a price.
The Water Works Company undertakes to perform a function of municipal government, and the city, which owns shares in the company and otherwise interested, pecuniary, is represented on the Board of Directors. The Water Works company is therefore a public corporation, established and created by the State to do and perform a public work, for the benefit of a political subdivision of the State. It is not, therefore, a monopoly created for private advantages.
We therefore are not impressed with the statement made by counsel that the price paid by the city for her water supply is a disguised donation. Had it even a semblance of such we woxxld not hesitate to say that it was corrupt and extravagant legislation on the part of the City Council that authorized the Mayor to make the contract, and as snch beyoncl tlie legitimate object and purpose of municipal government, and within the rule expressed in Handy vs. City of New Orleans referred to.
We conclude that Act 56 of 1884 does not violate the constitution of the State, and that Ordinance 909, passed by the City Council in pursuance of said act, is a valid ordinance, and that the contract made between the city of New Orleans and the Water Works Company in pursuance of the powers vested in said city by its present charter, and by said Act 56 of 1884, and said Ordinance, dated the 3rd day of October, 1884; and act passed before J. D. Taylor, notary public, on said day, is a legal and valid contract.
It is therefore ordered and adjudged and decreed that the judgment appealed from be avoided and reversed and annulled, and it is now ordered that plaintiffs' demand be rejected, the injuction issued herein dissolved and set aside, and the plaintiffs, taxpayers, pay costs of both courts.