Court Opinion

ID: 9831806
Source: CourtListenerOpinion
Date Created: 2023-09-01 21:22:14.600111+00
Date Added: 2024-06-11T07:43:38.111104
License: Public Domain

On Motion for Rehearing of Both Parties.
It is well enough in replying to appellants’ motion contending we erred in holding that appellees had an easement to quote from some of the provisions of appellants’ deed. It will also be seen that some of the covenants of the deed absolutely contradict certain statements made by appellees in their motion for a rehearing. Some of the covenants are:
(a) The deed required that the grantees connect their improvements, “including all baths, closets, kitchens, sinks, etc., * * * with the ■ sewer system in said town.”
(b) The “said grantee, his heirs or assigns, shall not establish or allow any privy, vault, or other outhouse of similar character on said property or any part thereof.”
(c) “Nor dig, erect, or allow on said land or any part thereof any well, cesspool, cistern, or other thing in which water may collect or from which it can be taken or used, it being the intention that the occupants of such property shall use the water exclusively from the water-worhs system contemplated to he erected in said town.” (Italics ours.)
(d) It was further provided that the “failure to strictly keep and observe either or any of the foregoing conditions by the owner or by any tenant, lessee, or other occupant of said property or any part thereof with the owner’s consent shall work as a forfeiture of the title to the particular subdivision of property, such as lot or block,” etc. .
(e) The right is granted to each owner “to bring any suit or talce out any legal process that may he proper to enforce the performance thereof, '* * * the right or easement to have said conditions strictly complied with, and such right to exist in the owner of each lot as to all other lots in said town, * * * the object of said conditions being mainly to promote the peace and health of the community, * * * but the warranty hereinabove expressed is not to be construed as extending to the easements and right granted in this paragraph.” (Italics ours.)
(f)“It is expressly provided that no forfeiture of title can be had (against grantees) for failure to comply with either of said conditions (of forfeiture against grantees) unless and until the party or parties operating the sewer systems and water system established reasonable rates or until rates are established by the authorities having power to establish such rates from time to time under the law.” (The italics are ours.) ■
Independent of the discussion made by us in the original opinion to show the existence of an easement to appellees and those similarly situated, a reference to this deed makes the proposition clear.
West bound the vendees to everything necessary and important for him to have to put in the system to compel them to take the water, etc., ’from the same system upon pain of forfeiting their holdings. So it follows by necessary implication, a corresponding obligation, that West would furnish the source of supply. The contract was mutually binding, so that his vendees should not be “bound forever, and he only for a day.”
Indeed, the’ contract well guarded the easement rights of the vendees, but there is no express method fixed whereby to determine what are reasonable rates, though the very last paragraph of his deed provides two alternatives. The first is that the parties “operating the sewer system and water system establish reasonable rates.” This was done supposedly by the sewer system, and appel-lees contest them, say they are unfair, unjust, and unreasonable, and threw the property in the hands of a receiver to operate and fix rates for them. The second and final method provided for in the conveyance is to be “established by the authorities having power to establish such rates from time to time under the law.” Appellee contends no court can establish rates. That must be done by the Legislature. Then to what authorities does this covenant refer to to fix the rates?
George West caused the “George West Sewer Company” to be incorporated under the laws ■ of this state by filing articles of incorporation in the office of the secretary of state on the 7th day of September, 1916. He likewise caused the incorporation of the “George West Water & Light Company, by filing articles of incorporation in the office of the secretary of state on the 16th day of August, 1916. On the 4th day of August, 1915, he conveyed to “George West Water & Light Company” all the property belonging to that system in the George West, town site by full description, and on the 9th of August, *2961916, conveyed all the property pertaining to the sewer system to the “George West Sewer Company” fully describing it.
Nowhere in the charters of the companies named is there any authority mentioned or method provided whereby the fixing of rates can be established. That question, in so far as the chartered companies are concerned, is left open. Greenville Telephone Co. v. City of Greenville (Tex. Civ. App.) 221 S. W. 997.
It is unfortunate that the deed, in going so much into detail requiring the grantees to take the water, etc., did not provide the method of determining the reasonableness of rates instead of requiring them to go to unknown “authorities'having-power to establish such” for their relief. In the situation presented, we only suggested what occurred to us a reasonable alternative in disposing of the troublesome question, but, as that suggestion is not desirable to either party, it is withdrawn, and the matter will be left open on the rate-making question to be determined according to the rules; of equitable jurisprudence and law in such cases and as provided for in' the conveyance and in accordance with the views expressed herein. In view of the fact that appellees say this court gratuitously declared in their favor without their request, the clause in the deed requiring them to take water from the system shall be of no effect, upon the contingency named, is hereby also withdrawn. That part of the opinion is as follows:
“If the appellants áre not then willing to operate the same for such charges, the appellants may with appellees’ concurrence take over the same by paying its reasonable value to be determined by a fair commission or committee of experts to fix its value and pay for it and then operate it. If that cannot then be arrived at, then the appellees may remove improvements, and that provision in their deeds requiring them to take water from said system be set aside and held for naught.”
[9] We do not think, as appellees contend, only the Legislature can fix these values. We do not deny its power, but it has not acted. We hardly think it has the flexible power to fix from time to time rates. If it had had the flexible rate-making power from time to time to fix rates in every case and in every contingency, Texas Railroad Commission would have never come in power made necessary through an amendment to the Constitution. Certainly this court has no power to fix rates, but may determine as to their reasonableness. In this case, however, we think under the circumstances the trial court has the adequate power to do so. It is held in Ball v. Texarkana Water Corporation (Tex. Civ. App.) 127 S. W. 1071:
“Neither can the courts, under the allegations of appellant’s petition, fix a rate for the future government of appellee’s business, as is asked to be done in this case. ,As before stated, this is a legislative, not a judicial, function. Except under conditions well understood, the court has no right to lay hands upon the business of the water corporation, and act in the capacity of a receiver or administrator there-q£ # * *
“It does not follow, however, that appellant’s petition states no ground for equitable relief. The business of the appellee, water corporation, is of a public nature, or, as commonly expressed, ‘affected with a public interest.’ Its franchise confers upon it the right to use the streets and public places of the city for laying its pipe's and conducting its business. The conferring of this privilege imposes upon it the obligation to serve the public in a reasonable way for a reasonable compensation.. It may adopt reasonable regulations for the conduct of its own business; but, subject thereto, it is not optional with it as to whom it shall serve, nor can it arbitrarily demand an unreasonable charge for its service or discriminate in its charges. ‘If this were not so, and if corporations existing by the grant of public franchises, and supplying the great conveniences and necessities of modern city life, as water, gas, elec-' trie lights, street cars, and the like, could charge any rates, however unreasonable, and could at will favor certain individuals with low rates, and charge others exorbitantly high, or refuse service altogether, the business interests and domestic comforts of every man would be at their mercy. They could kill the business of one, and make alive that of another; and, instead of being a public agency created to promote the public comfort and welfare, these corporations would be the masters of the cities they were established to serve.’ Griffin v. Goldsborough Water Co., 122 N. C. 206, 30 S. E. 319, 41 L. R. A. 240. * * * He is not seeking to enforce or make a contract, but to prevent injury to him arising under the duty owing by appellee to furnish water to him at reasonable, and not unreasonable, rates. Eor these and other allegations, the appellant, upon the face of his petition, was entitled to an injunction preventing the water corporation from cutting off his water supply; and, on final hearing, it was the duty of the court to hear testimony as to what would be a just compensation for such past service, and to then render such decree as the facts and the law should warrant. Griffin v. Goldsborough, supra; Smith v. Birmingham Waterworks Co., 104 Ala. 315, 16 South. 123; City of Mobile v. Water Supply Co., 130 Ala. 379, 30 South. 445; Richmond Nat. Gas Co. v. Clawson, 155 Ind. 659, 58 N. E. 1049, 51 L. R. A. 744; Public Service Corp. v. American Lighting Co., 67 N. J. Eq. 122, 57 Atl. 482; People’s Gaslight Co. v. Hale, 94 Ill. App. 406; City of Madison v. Madison Gas Co., supra; 30 Am. & Eng. Ency. of Law, 424; 20 Cyc. pp. 1162, 1165; 2 Beach, Mun. Corp. 834c; 4 Cook, Corporations, par. 931.”
See Cleburne Water & Ice & G. Co. v. City of Cleburne, 13 Tex. Civ. App. 141, 35 S. W. 733; Greenville Telephone Co. v. City of Greenville (Tex. Civ. App.) 221 S. W. 997.
We think the very last paragraph of the deed and appellants’ mutual obligation will deprive him of the claimed right to. remove his system at least until “the authorities *297Raving power to establish such (reasonable) rates from time to time under the law” have failed. It made no difference whether West ever intended he should receive a return on the investment in said water system or not; this does not justify a court bf equity to require him to furnish the same at a loss and with a burden to him.
It is the function of the courts to say what are and what are not unreasonable rates. It is apparent that the rates fixed by the receiver are not reasonable, and not fixed by any method known to the law in such cases. The agreement made between the parties upon the representations of appellants that the rates would be as low as any city or town in Southwest Texas not owning its own water and sewer systems, San Antonio and Corpus Christi not excepted, seems' to be the only basis agreed upon. This was the finding of the trial court.
Somewhat similar to this case are the facts stated in the case of Cleburne Water Ice & Lighting Co. v. City of Cleburne, 13 Tex. Civ. App. 144, 35 S. W. 734:
“The appellant had charged the citizens higher rates for water than the Bell rates, provided for in the contract; and, in the event of refusal to pay the higher rates, it would have cut off the supply of water. Had the supply been cut off, the citizens would have been damaged; and no remedy existed therefor. In such a contingency, there is ‘utter uncertainty in any calculation of damages from the breach of the covenants, and the measure of damages is largely conjectural,’ and no full and complete relief could have been obtained in an action at law. The equitable proceeding by injunction, under the facts and circumstances of this case, in our opinion, was the only adequate remedy. School Dist. of Borough of Sewickley v. Ohio Val. Gas Co., 25 Atl. 868; City of Winfield v. Winfield Water Co., 32 Pac. 663.
. “3. Do the terms of the contract bind said company to the Bell ratfes? The wording of that part of the contract that raises this issue is as follows: ‘The said S. E. Moss proposes to charge consumers of water the same rates as are now charged at Waco, Tex., by the Bell system of waterworks, or such other reasonable rates as from time to time shall be fixed by the city council of the city of Cleburne; it being expressly understood that the ■ limits of said rates shall not be less than is allowed by cities of like size and population in this state.’ The contention of appellant is that ‘the Bell rates were not to obtain, except and unless the rates therein set forth and contained should equal the rates charged in cities of like size and population as Cleburne in this state,’ while ap-pellee contends that, under the contract, the Bell rates should obtain until changed by the city council, and that no charge greater than the Bell rates was ever to be made. This involves the proper construction to be given to the terms of the contract. We are of opinion that the contract fixes the Bell rates as a basis, and that the company is bound to furnish water at that rate until the city council should fix other reasonable rates; and, in the event the city council saw proper to change the rate, it could not fix a rate less than ‘is allowed by cities of like size and population as Cle-burne in this state.’ Prom the facts and circumstances, it is evident that the contracting parties intended the Bell rates to prevail unless other cities of the character named fixed the water rate less than the Bell rates, in which case the city council of Cleburne would have the power to change the rates, provided a less rate was not fixed than allowed by such cities. It was not intended that the city council should fix rates higher than the Bell system. This construction, we think, is borne out’by the preamble to the second proposition submitted by Moss to the city council, which proposition was accepted and adopted in lieu of the original contract. Said preamble is as follows: ‘In view of the fact that objections have been made and are being made by certain people in the city to certain portions of the propositions heretofore made by me, and accepted by your honorable body, and being desirous of retaining as far as possible the good will of the people of Cleburne, I have sought to obviate, as far as possible, those objections, and to that end here submit this as a substitute for said accepted proposition for the purchase of the Cleburne system of waterworks.’ This statement does not show the objections urged by ‘certain people of the city,’ but we find that the terms of the first contract relating to rates to be paid by consumers were changed. The first contract provided that ‘said Moss proposes to charge consumers of water the same rates as are now charged at Waco, Tex., by said Bell water system, the rates' being the present adopted rates of said system.’ In the second contract the other clauses were added to this provision as shown above. We take it this change was made because the people objected to being bound absolutely to the Bell rate, not because the rate was too high at that time, as it was the lowest in the state, but because rates might become still lower, and they were not willing to be bound absolutely by the Bell rates when rates in the future might become less. Hence the provision authorizing the city council to fix rates, with the limitation as to other cities, which limitation was for the protection of Moss against the fixing of rates by the council at less than those of other cities of like character in the state. He evidently was willing to abide by the Bell rates, but, when the couqcil undertook to change, it could not go below other cities of like size and population. Again, about four years after the contract was entered into, the Bell rates were charged, and no change was attempted until a short time before the institution of this suit. While the using of said Bell rates, as stated, is .not conclusive, nor would it control the express terms of the contract, yet it is a strong circumstance pointing to the fact that the parties construed the contract in that light. It is a rule of construction that the intention of parties in making a contract wifi govern, if no violence is done to the express terms of the contract. City of Cincinnati v. Cincinnati Gaslight & Coke Co. (Ohio Sup.) 41 N. E. 239.
“The appellant being bound to supply water at the Bell rates, it is unnecessary for us to consider whether the rates attempted to be charged by it are reasonable or unreasonable. If appellant entered into a bad contract, it must abide thereby; for, in such a case, the courts will afford no redress. Smith v. Water*298works Co. (Ala.) 16 South. 124. The judgment is affirmed.”
[10] And In respect to the receivership the appellee -complains now that we did not pass on that question raised by him in his assignments. He has only himself to blame. In his assignments 25, 30, 40, 41, and 42, challenging the ruling of the court on the subject, he raised the question. But in setting Out his points for discussion thereunder, no reference whatever is made to any of such assignments. We are now urged to dismiss the receivership. It appears that the receivership was granted without notice, and the property has been in the possession of a receiver and operated by him who was appointed by the court October, 1921, appointed upon the alleged ground that appellants were letting the system fall out of repair, had discharged the mechanic, and that the town was without water. The allegations were found not true by the trial court.
The evidence showed that the plant had always been well cared for by the appellant at a large expense to himself who had always furnished ample water, and that no one had ever been deprived of water, notwithstanding some were in arrears for several months.
We are not willing to give our assent to the appointment of a receiver without notice to take charge of a waterworks system, oust the true owners, and operate it, because of a dispute as to what constitutes a reasonable rate. No amplification of the reasons or citation of authorities are necessary, because it is too obvious in such cases re-ceiverships do not present the remedy. Ball v. Texarkana Water Coloration (Tex. Civ. App.) 127 S. W. 1071.
. There is no relief to which appellee may be entitled that they cannot secure by injunction. The appellants’ motion to discharge the receivership is therefore granted, and the receivership is dismissed at the costs of appellees, and the receiver directed to restore to appellants the custody of all the property that has come into his possession as such. In all other respects the motion is refused. Likewise we also overrule' in toto ap-pellees’ motion for a rehearing.