In a suit in a circuit court by a water company to which a
municipal government has granted the exclusive right to supply it
and its inhabitants with water for fifteen years against the
municipality to prevent it from establishing or maintaining other
water works within the limits of the municipality until after the
expiration of said period, it did not appear affirmatively that it
was contemplated that the other works complained of were to go into
operation until after the expiration of that period, and as it did
not appear from the record that there was over $5,000 in
controversy,
held that this Court had no jurisdiction.
This is an appeal from a decree of the Circuit Court of the
United States for the Western District of Texas sustaining a
demurrer to the plaintiff's original and amended bills and
dismissing the same. The facts as alleged in the bills are
substantially these: by an ordinance passed May 7, 1881, the City
Council of the City of El Paso, Texas, assumed to grant
"the sole and exclusive right, warrant, and authority, for the
period of fifteen years, to manufacture, sell, and furnish water to
the inhabitants of the City of El Paso, to both public and private
buildings, and for irrigation within the corporate limits of said
city,"
with
"the sole and exclusive right, warrant, and authority for said
period to lay pipes, mains, and conductors underneath the streets,
alleys, lanes, and squares in said city, for the purpose of
conducting water,"
and by a subsequent ordinance rented hydrants at a certain
annual rent. By certain assignments and transfers, these rights
became vested in the plaintiff, and, in reliance thereon, it
expended a large sum of money, to-wit, the sum of $150,000, in
establishing its plant. The substance of these ordinances, the acts
of the plaintiff, and subsequent dealings between it and the city
are stated at length in the bills, but the sum of the whole matter
lies in the fact of the alleged exclusive right to supply water to
the city for the term of fifteen
Page 152 U. S. 158
years and to occupy the streets for the purpose of laying mains,
etc.
The wrong complained of is the passage of two ordinances in 1889
and 1890, approved by a vote of the people, authorizing the issue
of $25,000 and $75,000, respectively, of the bonds of the city for
the avowed and declared purpose on the part of the council of
sinking artesian wells and constructing a system of waterworks, to
be owned and operated by said council, for supplying water to said
city and inhabitants, for all public and private purposes, and the
relief prayed was that the city be enjoined from establishing,
maintaining, or operating any waterworks within the limits of said
city until the expiration of said period of fifteen years, and from
selling or negotiating any bonds or other securities for that
purpose.
It is also alleged that if the bonds are issued the plaintiff
will be compelled to pay taxes on its property for the interest on
said bonds, and to provide a sinking fund for the principal
thereof, but the amount of the tax which will be thereby cast upon
the plaintiff's property is not disclosed.
MR. JUSTICE BREWER, after stating the facts in the foregoing
language, delivered the opinion of the Court.
Probably the circuit court sustained the demurrer on the ground
that, under the Constitution of the State of Texas, adopted in
1876, the attempt to grant exclusive rights in these matters was
beyond the power of the city, and that, among other matters, is
discussed at length by counsel in their respective briefs. That
constitution (article 1, section 26) provides that "perpetuities
and monopolies are contrary to the genius of a free government, and
shall never be allowed." In the case of
Brenham v. Brenham
Waterworks Co., 67 Tex. 542, the supreme court of the state,
construing this provision, held
Page 152 U. S. 159
that a contract similar to that made with the plaintiff was
inhibited by the constitution, and that neither the city council
nor the state legislature had power to make or authorize such a
contract.
We do not deem it necessary to consider the important
constitutional question thus presented, for it does not appear from
the record that there is over $5,000 in controversy, as is
necessary to give this Court jurisdiction. The bill is filed by the
plaintiff to protect its individual interests and to prevent damage
to itself. It must therefore affirmatively appear that the acts
charged against the city and sought to be enjoined would result in
its damage to an amount in excess of $5,000. So far as respects the
matter of taxes which, by the issue of bonds, would be cast upon
the property of the plaintiff, it is enough to say that the amount
thereof is not stated, nor any facts given from which it can be
fairly inferred.
With regard to the claim of exclusive rights, there is no
allegation in the bills of the time at which the city will, unless
restrained, commence the operation of its contemplated system of
waterworks, and thus interfere with the actual performance of its
contract with the plaintiff so far as respects the supply of water.
Every averment would be satisfied by proof that the city intended
to begin the use of its proposed waterworks on the day before the
expiration of the fifteen years. And the only distinct disclosure
of damage in the bills or by the affidavits filed in this Court is
that resulting from an actual supply of water by the city, and a
failure to pay the plaintiff for the use of its hydrants. So far as
the mere construction of waterworks is concerned, that of itself is
no violation of the terms of this contract. The time for which the
exclusive right, as claimed, was given, was fifteen years, and the
city would be guilty of no breach of any obligations if, during the
life of the contract, it proceeded to sink artesian wells, to
establish waterworks, and put itself in condition to, in the
future, and after the termination of the fifteen years, supply
water for all public and private purposes. Suppose that the very
next day after the acceptance by the grantee of these franchises,
the city had commenced the work of sinking
Page 152 U. S. 160
artesian wells and establishing a system of waterworks, and had
continued its labors in that direction during the entire life of
the contract. That would have been no breach of its obligations to
the plaintiff. It might have affected pecuniarily the value of the
plaintiff's plant, in that it carried a strong intimation that the
moment the fifteen years expired the city would itself engage in
the work of supplying water, and thus take from the plaintiff its
business. So, preparations made by the city at the time stated in
the bills, to-wit, 1889 and 1890, for the establishment of
waterworks, may, and doubtless did, have some effect upon the value
of the plaintiff's property, but the extent of the diminution of
value thus caused is not alleged, and cannot be inferred. The bills
do not allege that the city, in terms, denies the validity of its
agreement to pay rent for hydrants, or otherwise, and the acts
which they charge that the city is about to do are acts which the
city may do, consistently with the continuance of the contract, and
as a mere matter of preparation for the discharge of a public duty
after the termination of that contract. Under these circumstances,
we are of the opinion that it is not affirmatively disclosed by the
record that the amount in controversy is a sum in excess of $5,000,
and therefore, for want of jurisdiction in this Court, the appeal
must be
Dismissed.
