Court Opinion

ID: 8754744
Source: CourtListenerOpinion
Date Created: 2022-11-26 11:41:18.55879+00
Date Added: 2024-06-11T17:01:11.307959
License: Public Domain

ACHESON, Circuit Judge.
This was an action brought by the Metropolitan Water Company against the Armour Packing Company to recover the price of water furnished by the plaintiff to the defendant at Kansas City, in the state of Kansas, less such sums as admittedly had been paid thereon. The controversy between the parties concerns the price which the defehdant is bound to pay for the water so furnished; and the question in dispute arises upon an ordinance (No. 2,131) of the city of Kansas City, Kan., passed in council on December 4, 1891. The parties differ as to the meaning and effect of that ordinance. For the proper understanding of the question in dispute certain facts must be stated.
Kansas City in the state of Kansas and Kansas City in the state of Missouri adjoin each other, the state line separating the two cities. In the year 1874 the National Waterworks Company received from Kansas City, Mo., a franchise to lay its pipes in the public streets of that city for the purpose of supplying the city and its inhabitants with water; and thereafter, and until the year 1895, that company owned, maintained, and operated under said franchise a waterworks system in Kansas City, Mo., supplying that city and its inhabitants with water. On November 29, 1891, by Ordinance No. 173, Kansas City; *854Kan., granted to the National Waterworks Company a franchise to supply water to that city and its inhabitants and other consumers therein for a period of 10 years. The eighth section of this ordinance (No. 173) reads thus:
“See. 8. The water rates to consumers shall not exceed the rates paid by the citizens of Kansas City, Missouri, at any time, and shall be paid for such time as the grantee may deem best for both parties.”
Adjoining Kansas City, Kan., in 1881, were two municipalities known as “Wyandotte” and “Armourdale.” Waterworks were erected, for the purpose of supplying these municipalities with water, and the franchises’therefor were combined in 1885 in the Wyandotte-Armourdale Water Company. In that year the National Waterworks Company acquired all the stock and bonds of the Wyandotte-Armourdale Water Company, and changed its name to Kansas City Water Company. Afterwards, by virtue of its ownership of all the stock an’d bonds of that company, the National Waterworks Company furnished water to Wyandotte and Armourdale. By 1891, old Kansas City in the state of Kansas and Wyandotte and Armourdale were consolidated into one municipal corporation under the name of Kansas City, Kan. On December 4, 1891, the city of Kansas City, Kan., passed two ordinances in the same terms (No. 2,130 and No. 2,131). Ordinance No. 2,130 relates to the franchises originally given to water companies to supply water to that part of Kansas City, Kan., which was formerly Wyandotte and Armourdale, and that ordinance applies to that section of the city. Ordinance No. 2,131 relates to the franchise granted by Ordinance No. 173, above mentioned, to the National Waterworks Company, and applies to that part of Kansas City, Kan., in which the packing house of the defendant below is located, and where the water in question was furnished to the defendant. As already stated, it is out of Ordinance No. 2,131 that this controversy has arisen. This ordinance enacts:
“Section 1. That Ordinance No. 173 of tbe former city of Kansas, state of Kansas, being an ordinance entitled, ‘An ordinance to provide a supply of water for the inhabitants of the city of Kansas, state of Kansas,’ approved Nov. 29, 1881, be and the same is hereby ordained an ordinance of the city of Kansas City, and that all rights, privileges and franchises therein granted are hereby granted unto the said the National Water Works Company of New York, and its successors and assigns, for the term of fifteen years from and after the passage, approval, acceptance and publication of this ordinance, under the conditions and restrictions named in said ordinance, No. 173, and under the further conditions that from and after the publication of this ordinance and during the continuance of said franchise, the compensation for each hydrant now located or that may be located hereafter by the said city of Kansas City, shall be at the rate of fifty ($50) dollars per annum from and after January 1st, 1892, and the said city hereby agrees to pay such sum for' such rental semiannually in January and July of each year. The water rates to consumers during the continuance of this franchise shall be as per following schedule.”
Here follows a schedule of water rates to consumers. Then, in note 3, this ordinance contains the following stipulation:
“It is also agreed that if any less rate is giyen to Kansas City, Missouri, during the continuance of this franchise, the same schedule of rates shall apply under this ordinance and any other benefits given Kansas City, Missouri, shall also apply both to public and private consumers.”
*855In 1895 the city of Kansas City, Mo., in the exercise of a statutory right, purchased the waterworks and water system of the National Waterworks Company located in Missouri, and has since maintained and operated the same. On December 6, 1898, the city of Kansas City, Mo., passed an ordinance (No. 10,951) fixing the water rates to be charged by that city for water furnished by that city to consumers, which ordinance has since been in force. In 1895 the National Waterworks Company caused the Metropolitan Water Company, the plaintiff, to be organized, and caused all the waterworks properties and franchises in Kansas City, Kan., to be transferred to that company. The Armour Packing Company claims here, as it did in the court below, that Ordinance No. 10,951 of Kansas City, Mo., passed on December 6, 1898, fixes the rate at which it may take water from the plaintiff in Kansas City, Kan., and this by reason of the provisions of Ordinance No. 2,131 of the latter named city. The court below, however, declined to adopt this view. The court was of opinion that in and by note 3 of Ordinance 2,131 of Kansas City, Kan., the National Waterworks Company stipulated only for its own acts, and what the stipulation meant was that, if the water company gave to Kansas City, Mo., lower rates than those specified in Ordinance No. 2,131, then the water company should give the same reduced rates to Kansas City, Kan. The court therefore held that the rates which Kansas City, Mo., by its ordinance of December 6, 1898, fixed for the consumers of water in that city, did not bind the plaintiff in respect to water furnished by it to consumers in Kansas City, Kan., under its franchise granted by that city by Ordinance No. 2,131. Accordingly, upon the agreed statement of facts the court gave judgment in favor of the plaintiff in the sum of $8,542.30.
The question we are called on to determine upon this writ of error is whether the court below rightly construed Ordinance No. 2,131. That ordinance, having been duly accepted by the National Waterworks Company, became a contract between the water company and the city of Kansas.City, Kan. It therefore, like other contracts, is to be interpreted — if the meaning be in any respect doubtful — with reference to the circumstances surrounding the parties at the time it was made. Canal Company v. Hill, 15 Wall. 94, 21 L. Ed. 64; Merriam v. United States, 107 U. S. 437, 2 Sup. Ct. 536, 27 L. Ed. 530. Now, at the time of the passage and acceptance of Ordinance No. 2,131, the National Waterworks Company was the owner of the waterworks in Kansas City, Mo., and was supplying that city with water. It was natural and reasonable that the grant of the water franchise to that company by Kansas City, Kan., should provide that the water company should not exact from that city greater water rates than it should give to Kansas City, Mo. Note 3 of the ordinance employs apt language to effectuate such purpose. The parties to the contract which is embodied in Ordinance No. 2,131 were fixing water rates as between themselves. It may therefore well be supposed that they contracted with reference to the then existing state of affairs — with respect to the fact that the grantee of the franchise conferred by Ordinance No. 2,131 owned the waterworks and system in Kansas City, Mo., and was furnishing water to that city and its inhabitants under a franchise granted by that city. *856It does not appear that any change in water service was then in contemplation. Kansas City, Mo., indeed, had a statutory right to purchase the waterworks in that city at the expiration of the then current term of the water franchise, if the grant thereof was not renewed. But such acquisition by the city was not impending at the time of the passage of Ordinance No. 2,131. If it had been the intention of the parties that water rates to consumers in Kansas City, Ivan., should not exceed the rates which Kansas City, Mo., might establish for consumers in that city, different language would have been used from that contained in note 3. We think, with the court below, that the words, “if any less rate is given to Kansas City, Missouri, during the continuance of this franchise, the same schedule of rates shall apply under this ordinance, and any other benefits given Kansas City, Missouri, shall also apply both to public and private consumers,” are fairly referable to the acts of the National Waterworks Company —to rates and benefits given by that company.
We are not able to accept the view suggested by counsel for the plaintiff in error that section 8 of the old ordinance No. 173 is to be treated as still in force, and be read into Ordinance No. 2,131 by virtue of the general language of section 1 of the latter ordinance. Ordinance No. 173 did not fix any schedule of water rates to consumers, and section 8 was intended as a limitation upon the rates which the water company might charge consumers. But Ordinance No. 2,131 fixes the water rates to consumers by a schedule of rates set out in the ordinance, subject to the single exception expressed in note 3. The provision of Ordinance No. 173 -in respect to rates was not continued, but was superseded, by the express provisions of Ordinance No. 2,131.
We are of opinion that the conclusion which the court below reached is in accordance with the true meaning of Ordinance No. 2,131, and accordingly the judgment is affirmed.