Court Opinion

ID: 7193224
Source: CourtListenerOpinion
Date Created: 2022-07-24 16:59:31.346365+00
Date Added: 2024-06-11T16:16:14.820040
License: Public Domain

The opinion of the Court was delivered by
Fenner, J.
The Act of the General Assembly, No. 33 of 1877, is the charter of the defendant company, and is entitled “An Act to enable the City of New Orleans to promote the public health and to afford greater security aqainst fire, by the establishment of a corporation to he called the New Orleans Water-works Company,” etc.
*433The act provides for the transfer from the city of New Orleans to the company of “the water-works and all the property appurtenant thereto,” then belonging to said city.
It confers upon the defendant sundry valuable privileges, amongst others, “that it shall have for fifty years the exclusive privilege of supplying the city of New Oilcans 'and its inhabitants with water from the Mississippi river, or any other stream or river, by means of pipes and conduits,” etc., and to charge therefor.
The eleventh section of the act, which is directly responsive to the purposes declared in the title, provides:
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, and 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 duly 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-toorlcs Company, used in accordam.ee with this aet, shall he exempt from taxation — State, municipal and pan-ocldal.
By an amendment of the act, the exemption from State taxation was repealed.
The city of New Orleans brought the present Suit to recover $11,-484 87, amount of taxes levied on the defendant’s property for the year 1881.
Defendant, in its answer, pleads, in bar of plaintiff’s. action, the ex-empti'on granted by the foregoing act; and then, reconvening, demands' that-in case the-plea of exemption- should be overruled, .the city should be condemned to pay the value of the water used during- the year for which the tax' was levied.
Judgment was rendered in favor of the city for the tax claimed and in favor of reconvenor against the city for the value, of the water, via: *434the sum of forty thousand two hundred and eighty-one dollars and eighty-seven cents.
The correctness of the judgment for the tax does not admit of question.
The courts organized under the Constitution of 18G8 repeatedly decided that neither municipal authorities nor the State Legislature could validly exempt property from taxation, either by commutation of such taxes, or in any other manner, unless the property was “ actually used for church, school or charitable purposes.” See, specially: City vs. Lafayette Insurance Co., 28 A. 756; Louisiana Cotton Manufacturing Co. vs. City, 31 A. 440; City vs. Louisiana Savings Bank, Id. 827; also: 27 A. 376, 646, 648; 28 A. 498, 512; 31 A. 292, 637, 519.
This jurisprudence has been followed by this Court, as at present organized. State vs. Louisiana Savings Bank, 32 A. 1137; City vs. New Orleans Sugar-shed Co., 35 A. 549.
To the extent that this subjection to taxation destroys or impairs the consideration upon which rests the contract of defendant to supply free water to the city, defendant is undoubtedly entitled to relief; but to that extent only.
The position of defendant, impliedly though not expressly approved by the judge a quo, is that the exemption from taxation was the sole consideration of the defendant’s obligation to furnish the city with free water, and that when the city elected to claim its taxes it released the defendant from its entire obligation to furnish water free and became bound to pay for all the water used, even though exceeding, as it does, three-fold the taxes.
Such is not our view.
While the free water supply is declared by the act to be the consideration, and doubtless the sole consideration, of the exemption from taxes, the act does not declare, nor do we think it means, that the exemption is the sole consideration of the obligation to supply the. water to the city.. On the contrary, we consider that the latter is a principal and fundamental provision of the contract, the consideration of which is found not only in the exemption but in all the valuable privileges conferred by the act. i
This is so clear to.our minds from the reading of the entire act, and from the nature and purposes of the stipulation, as indicated by the title, that we deem it unnecessary to elaborate our reasons. The.result is, that defendant has suffered, not a total, but only a partial failure of the consideration of its contract and is entitled to relief only pro tanto.
*435The principle governing the relief is well espressed by Mr. Parsons: “Where the consideration fails only in part, xuinciples analogous to those which govern’ an inquiry into the adequacy of a consideration woxüd he applied to it. If there were a substantial consideration left, although much diminished, it would still suffice to sustain the contract. * * * If the consideration and the agreement founded upon it, both consisted of several parts and a part of the consideration failed, and the appropriate part of the agreement could be apportioned to it, then they might be treated as several contracts, and a recovery of money paid be had accordingly.” 1 Parsons Contracts, 402; Franklin vs. Miller, 4 A. & E. 605; Roberts vs. Havelock, 3 B. & Ad. 404.
There could not be a clearer case for the application of these principles than this.
Defendant’s obligation to furnish water to the city is unrestricted as to amount, and it appears that the, city has actually used and the defendant has furnished, water to the value of more than forty thousand dollars. The extent to which the considei'ation has failed is exactly the amount of the city’s claim for taxes. If the city shall be condemned to pay defendant for that amount of water, exact justice will be done and defendant can claim no more.
But for the nature of the city’s claim being for taxes, compensation would preservo the exact status quo.
We regret that the city’s financial condition prevents the judgment against her from being the immediate equivalent, but the la.w regards interest as the only compensation for the delay which defendant may suffer in the collection of its judgment.
We observe that in the sugar-shed case we allowed the defendant a judgment in recouvention for an amount slightly exceeding the city’s claim for taxes. It may he that, in that case, the exemption was the sole consideration of the bonus; but in any event, the difference between the two claims was so slight that the view now presented did not attract our attention. City vs. New Orleans Sugar-shed Co., 35 A. 549.
It is, therefore, ordered, adjudged and decreed that the judgment appealed from be amended by reducing the principal of the amount allowed defendant on its reconventional demand from $40,281 87 to $11,484 87; and that, as thus amended, the same be now affirmed, defendant. to pay cost of this appeal.