Court Opinion

ID: 7193226
Source: CourtListenerOpinion
Date Created: 2022-07-24 16:59:31.349971+00
Date Added: 2024-06-11T16:16:14.823012
License: Public Domain

*437DissbntxNG Opinion.
Poché, J.
A second examination of this case and a careful study of the position taken by counsel representing the defendant company, have led me to the conclusion that we had erred in a portion of our first opinion and in the flecree rendered. Hence, I think that a rehearing should have been granted. There is, and there can be,'but one opinion as to the nullity of the exemption of taxation and that, therefore, the tax claimed by the city must be enforced.
But the very reasoning which leads to that conclusion should, in my opinion, carry with it a declaration of the complete nullity of the contract, of which the tax exemption was one of the considerations, unless it can be made to appear that the act provides for or contemplates other and distinct considerations for the stipulated free supply of water to the city by the defendant company.
In my opinion, the reverse of that proposition clearly appears from a proper construction of the true meaning of section 11 of the Act (No. 33 of 1877) which is the only section or part of the act in which reference is made to the free supply of water to the city.
In that section, after providing that the city of New Orleans shall be allowed to use water, * * free of charge, for the extinguishment of fires, cleansing of the streets and for the use of all public buildings, public markets and charitable institutions, the law maker used the following explicit and unambiguous language: "It shall be the duty of the said company, wheresoever 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 Waterworks Company, used in accordance with this act, shall be exempt from taxation,” etc.
It cannot be successfully denied that the “purposes herein mentioned ” in the last part of the section refer to the free supply of water for the extinguishment of fires, cleansing of the streets, and for the use of all public buildings, public markets and charitable institutions.
There is no other language or provision in the act to which this reference could possibly apply. The language used fills out the continuation of a leading idea and the conclusion of a stipulation which is the main feature of the section. It could, therefore, refer to no other purposes already mentioned in the act or to be mentioned further on. That being the case, there is less doubt as to the subject matter to which the subsequent words “and in consideration thereof” refer to. It is more than plain, that they refer to the corresponding obligation *438of the company to supply water free of charge for the purposes “ herein mentioned.” Hence, the section must- have been intended to, and it does beyond a doubt, create a complete and independent contract between the city and the company. The contract, as thus shaped and created, has reference to no other portion of the act, which is complete as an act without the contract contained in the section — as complete as the contract itself stands without any reference to any or to all of the othei provisions of the act.
Hence follows, in my opinion, the irresistible conclusion, that the consideration furnished by one of the contracting parties having utterly tailed, the entire contract must fall.
I have carefully, but in vain, sought for any other consideration in the act "which the city is made to contribute in compensation of the free water supply stipulated in its favor by the provisions of the eleventh section of the act.
There is no force in the suggestion that such a consideration is found in the valuable prerogatives and exclusive privileges conferred to the company. No language in the act justifies such a conclusion. On the contrary, language may be found which excludes even the implication that the act contemplated a free supply of water to the city for any other consideration than that stipulated in section 11. Thus we find that section 5 provides: “ That the said waterworks company shall own and possess the privileges acquired by the city of New Orleans from the Commercial bank: that it shall have for fifty years * * * the exclusive privilege of supplying the city of New Orleans and its inhabitants with water,” etc.
By this plain and unambiguous language the city is placed on exactly the same footing as “ its inhabitants,” and is to be regulated by the same laws of supply and demand. In the case of Waterworks vs. Sugar Refinery, we recently expounded the meaning of the privilege conferred by that section and we restricted the scope of its meaning to “ selling water.”
Besides, the obligation which rests on all large cities to supply then-inhabitants with .water, coupled with the fact that the city was anxious to be ridden of the burden which she had inherited from the Commercial bank, were serious and sufficient considerations for the charter to a corporation which furnished its own means for such a vast, useful and indispensable enterprise and paid the city the full value of the franchises transferred t,o it.
The grant of exclusive privileges was guarded and checked by the reserved power of controlling the company’s charges and in limiting *439the rate of its annual revenues, as shown by the provisions of section 15 of the act.
It is therein provided that the net profits of the company shall not exceed ten per cent per annum, and that in order to regulate this matter the city council, through a committee, shall have access to the books of the company; and that in case of a revenue in excess of the limitation, the city council .shall have the power to reduce the rate of charges for water supply, so as to accomplish the end proposed; and it is also provided that the company shall not exact charges exceeding those now paid by the city, reserving to the latter the power of enforcing compliance by the writ of mandamus. The whole tenor of the act distinctly conveys the conclusion that, with the exception of the provisions contained in section 11, the city has no greater privileges in the matter^of water supply than all other consumers of water within her limits; and that quoad this company she occupies precisely the same position which she has always held towards the gas company or any other corporation created for the purpose and vested with the power of furnishing any commodity to “ the city and its inhabitants.”
For those reasons, I respectfully dissent from the conclusions of my associates of the majority.
Todd, J., concurs in this opinion.