Lidgerwood Park Water Works Co. v. City of Spokane

The opinion of the court was delivered by Scott, C. J. In October, 1896, the plaintiff was the owner of a water supply system in an addition to the city of Spokane which was partly without the city limits. The city did not own any water system in that addition and negotiations were had between it and the plaintiff for the transfer of said plant to the city, whereby plaintiff conveyed the same to the city with the exception of the pumping plant. The contract contained the following provisions: “ The party of the second part covenants and agrees to lay immediately; that is to say, within a reasonable time, as soon as the city has money on hand that can be used to pay the freight charges on water pipe, to be placed as follows: A six inch iron water main from Division street, in the city of Spokane, over to and into the reservoir of the party of the first part in Lidgerwood Park, and to maintain the same, and to supply and furnish water hereafter to the residents of Lidgerwood Park, i. e., that portion of Lidgerwood Park included within the city limits; provided, however, that if the city shall furnish water to the people in that portion of Lidgerwood Park not included within the city limits, that the city reserves the right to discontinue the supply of water, without notice, to any and all persons living outside the city limits in said Lidgerwood Park, water to be furnished at the usual rates charged by the said party of the second part for such service, the party of the second part to have all revenues and to operate and conduct said system as a part of its water works system, in the same and no other manner. The party of the second part further covenants and agrees, on or before the 15th day of September,: 1897, to pay to the party of the first part, its successors and.assigns, such compensation for the said rights and property, if any, [367] as may be agreed upon by tbe arbitration of tbe mayor, tbe chairman of tbe finance committee and tbe president of tbe board of public works of tbe city of Spokane, whose action, when approved by tbe city council, shall be binding and conclusive upon tbe parties. It is agreed that, should tbe said arbitrators determine that tbe party of tbe first part shall not 'be entitled to any further compensation, than tbe benefits accruing by reason of tbe party of tbe second part operating and maintaining said water system and putting in tbe pipe aforesaid, then tbe benefits aforesaid shall be deemed tbe consideration for this contract.” Ho arbitration having been bad and tbe time having expired, tbe plaintiff brought this action to recover tbe sum of $20,000 as tbe value of tbe property transferred. The city answered, setting up tbe contract. A demurrer by tbe plaintiff to tbe answer was overruled and an appeal is taken therefrom, tbe contention being that, tbe time for tbe arbitrators to act having expired, tbe plaintiff can sue for tbe value; and tbe further contention is made that tbe provision relating to tbe arbitration is void in consequence of the stipulation that tbe action of tbe arbitrators should not be binding unless approved by tbe city council. We are of tbe opinion that tbe action of tbe court was right. It is evident that tbe principal consideration for tbe sale of tbe water works was not tbe provision for possible further recompense, which was practically left to tbe city itself to allow if it saw fit, but was tbe acceptance of the plant by tbe city and tbe agreement to connect it with tbe general system which it bad in operation, and to maintain it, etc. There was no admission in tbe contract of any further indebtedness for tbe plant, and we are of tbe opinion that it was incumbent upon tbe plaintiff to have demanded of tbe arbitrators that they proceed to arbitrate with reference to further compensation, if be de [368] sired any, before tbe time expired, and not having done so, tbe action cannot be maintained. Kor do we think the provision for the arbitration was void in consequence of the stipulation that the preliminary finding of the officers named, if in favor of the plaintiff, should be approved by the council to be binding on the city. It amounted to an arbitration by said officers named and the council, and we think it was valid. Affirmed. Dunbar and Reavis, JJ., concur. Gordon, J., concurs in the result.