Phœnix Water Co. v. Common Council
Phœnix Water Co. v. Common Council
Opinion of the Court
The appellant, the Phoenix Water Company, a corporation, in April, 1904, brought suit in the district court of Maricopa County to restrain the city council of the city of Phoenix from issuing, selling, and disposing of its bonds proposed to be issued and disposed of for the purpose of constructing a system of waterworks for the city of Phoenix, Arizona. The defendant interposed a general demurrer to the complaint. The demurrer was sustained. The plaintiff elected to stand on the complaint unamended, whereupon judgment was entered upon the demurrer. From this judgment the Phoenix Water Company has appealed.
The body of the complaint in this ease occupies thirty pages,
Appellant’s contention, briefly stated, is that its complaint states a good cause of action for the following reasons: 1. That the city is about to violate, to plaintiff’s irreparable damage, an implied contract not to enter business in competition with it; 2. That the city is about to injure plaintiff as a taxpayer by embarking in an unnecessary, ill-advised, money-losing business enterprise; and 3. In support of each of these propositions, that unqualified persons were allowed to register and vote for the issuance of municipal bonds and qualified persons prevented from registering and voting who would have voted against the issue, whereby, illegally and fraudulently, the return showed that those supporting the issue had prevailed.
There cannot be an implied contract in a grant of franchise by a municipality that the municipality will do nothing to impair or 'destroy the value thereof, or that it will not enter into competition with the grantee. Such a restraint can be imposed only by an express provision. It would be a work of supererogation to reiterate the reasons, founded on public policy, which have led courts to lay down these principles. They are set forth in the following eases, strikingly in point: Knoxville Water Co. v. Knoxville, 200 U. S. 22, 26 Sup. Ct. 224, 50 L. Ed. 353; Joplin v. Light Co., 191 U. S. 150, 24 Sup. Ct. 43, 48 L. Ed. 127; Bienville Water Supply Co. v. Mobile, 175 U. S. 109, 20 Sup. Ct. 40, 44 L. Ed. 92; Hamilton Gas Light Co. v. Hamilton, 146 U. S. 258, 268, 13 Sup. Ct. 90, 36 L. Ed. 693. We do not deem it tenable that the question whether the construction and operation, by the city of Phoenix, of a system of waterworks would be an economical and wise enterprise for the city and taxpayers
The complaint does not state facts, sufficient to constitute a cause of action. The judgment of the district court is affirmed.
Reference
- Full Case Name
- PHŒNIX WATER COMPANY, a Corporation, and v. THE COMMON COUNCIL OF THE CITY OF PHŒNIX, and
- Cited By
- 3 cases
- Status
- Published
- Syllabus
- 1. Waters — Municipal Corporations — Grant op Franchise — Implied Contracts. — There cannot- be an implied contract in a grant of franchise by a municipality that it will do nothing to impair or destroy the value thereof, or that it will not enter into competition with the grantee. Such a restraint can be imposed only by express provision. 2. Same — Operation of Waterworks — Judicial Beview. — The question whether the construction and operation by a city of a system of waterworks, determined upon in a lawful manner, would be an economical and wise enterprise is not a matter for judicial inquiry. 3. Municipal Corporations — Issue of Bonds — Election—Collateral Attack. — An election to determine whether municipal bonds shall be issued having been held lawfully and the return thereof, lawful on its face, showing the proposition to have prevailed by the lawful majority, the return cannot be attacked collaterally for errors or fraud in the conduct of the election or in the registration preceding it. (Syllabus by the Court.)