City of Leadville v. Leadville Sewer Co.

Mr. Justice Hill delivered the opinion of the court: •'It appears that there were no sewers in the city of Leadville prior to the year 1886, at which time the appellee was incorporated under the laws of Colorado with a capital stock of $10,000.00. Its objects as set forth in its articles of incorporation were, “to construct, own, operate and maintain sewers and drains for sewer purposes in and about the city of Leadville, * * Its corporate existence was fixed at twenty years. August 5,1886, appellee applied to the city council of Leadville for permission to run and operate sewers through certain streets and alleys of the city. Pursuant to said application, the city council, hy motion, granted, or attempted to grant, the permission prayed for, and, thereafter, relying upon this permission, appellee constructed a sewer system in some of the streets and alleys of the city, and sundry properties were connected with it upon the payment of certain rates fixed hy the appellee. It appears that — 122 — at that time the stockholders, or most of them, were property owners, and the same rate was charged them as others. At four different times thereafter (the last being in 1891) the appellee applied to and received from the city council permission to, and did, construct and •extend sewers upon other streets and alleys, and ultimately the system covered a number of streets and alleys, principally in the business section, and numerous citizens connected their properties, and paid the rates prescribed by the sewer company. No ordinance was passed granting or attempting .to grant to the appellee any franchise, and the only right it had (if any), for its use of the streets and alleys was secured through the permits, which were indefinite as to time. The only evidence on the subject is the records of the city, which, as to the first permit states: “A petition of The Leadville Sewer Company asking permission to run and operate a sewer was read * * *. ‘ ‘ On motion * * * the petition was granted on condition that the work be prosecuted under the direction of the committee on streets, * * *. Motion carried. ” The permits for extensions were similar. The only ordinances enacted concerning the subject were those regulating the method by which the streets and alleys might be excavated for the laying or repairing of water, sewer and other pipes. Up to the time of this trial no other sewer system of any consequence was provided and a large portion of the city was without sewers. When the corporate existence of the appellee expired in 1906, renewal certificates were made by its officers for another twenty years; and it continued to operate and maintain its system, without objection by — 123 — the city, until February 11, 1908, when the city council, at a regular meeting, passed the following resolution: “Resolved, by the City Council of the City of Leadyille, that all permits or licenses of every hind and character heretofore granted to the Leadville Sewer Company be and the same are hereby revoked, set aside and annulled, and, further, that the said The Leadville Sewer Company shall not be permitted to make any excavation of any kind in any of the streets, alleys or public places of the City of Leadville for any purpose, nor shall said Company be permitted to charge any inhabitants of said City for any sewer connection or service as this City does not recognize in any manner any rights of any kind in the said The Leadville Sewer Company in or to any sewer in said City, or in or to any charges for the use of the same, but hereby expressly repudiates the same. ’ ’ Thereafter, and until the bringing of this action, the appellee ceased to excavate in the streets and alleys for the. purpose of disconnecting consumers, although some of its patrons refused to make further payment for the use of the sewers. In March, 1908, a quo warranto suit was instituted in the district court of Lake county, by the district attorney, to test the rights of the appellee to continue its operation in the streets and alleys of the city, and to determine the property right to the sewer pipes. The claim was that the appellee was exercising these rights without due warrant or authority of law, it having no such rights and never having had. The sewer pipes, being a part of the realty, were not the property of the appellee; but belonged to the city for the use and benefit of its inhabitants. The quo luarranto suit is still pending and undetermined. Matters thus dragged along until on or about May 28, 1908, when the main sewer on Harrison avenue — 124 — (the principal street of the city) became clogged and it was contended by the city that its condition thus became a menace to the health of its inhabitants. The appellee took no steps to remove the same until June 1st, when it commenced to excavate in the street for that purpose, but was prevented from finishing by the officers of the city, who, at the expense of the city, employed men to excavate and remove the clog and repair the sewers, which was done without injury or expense to the appellee, and the work was finished prior to the issuance of the temporary restraining order in this action. The city disclaimed any intention of doing anything to injure or damage the sewers, but proposed to continue the enforcement of its resolution in prohibiting the appellee from excavating in the streets of the city. In making the repairs, it appears the city requested the agents of the appellee to furnish the materials, which they refused to do. Also, the city, through its officials, offered and agreed with the appellee to enter into an agreement in substance that in case of any stoppage, breakage or leakage in the pipes, thereafter, they should be repaired under the direction of the mayor, the men who were then employed by the appellee to have the preference, if they desired, in performing such services, and in case the sewers should be adjudged to be the property of the city, it to pay the entire expense of such labor; neither party to waive any rights in the quo warranto action on account of such agreement. The object evidently being to prevent anything from happening which would, endanger the public health. But the appellee declined and instituted this suit against the city, Mr. Bose (its mayor) and other officials, to restrain it and them from intérfering or hindering it in its work of excavating in the streets and alleys for the purpose of removing any stoppage in its sewer — 125 — pipes, or for the purpose of cutting off and disconnecting private consumers who refused or neglected to pay, or from interfering in any manner in its operation of the sewers or sewer pipes, etc. In its answer the city denied the appellee’s right to continue the operation of its plant; claimed it was a trespasser in the streets; plead the pendency of the quo loarranto suit to test its right to continue, and the prayer therein that the sewers be decreed to be the property of the city, which action was undetermined ; claimed that the appellee and its agents were attempting to defeat a trial of that cause; declared their intention, in order to protect the public health, to continue, unless enjoined, to prevent the appellee from excavating in the streets and alleys; claimed that appellee had notice of the resolution of February 11th, and that it complied therewith until June 1,1908, and, substantially set forth the facts as hereinbefore stated. Decree was rendered in favor of the plaintiff with a perpetual-injunction as prayed, with a proviso that it should not be taken to interfere with the adjudication of any rights as between any or either of the parties in the quo warranto suit then pending; from which judgment the city, and its officials have appealed to this court. It is contended by the appellants that the appellee had no right to continue, or any lawful authority to perform any of the acts which it had performed in the past, and, in any event such an extreme and exceptional case is not presented as calls for the interference of a court of equity. They contend that the case of Weaver et al. v. The Canon Sewer Co., 18 Col. App. 242, is controlling, wherein it is held that subdivision 10 of § 4403, Mills’ Ann. Stats., having empowered municipal corporations to construct sewers and to regulate their use, and having provided a method by which the cost of their construction may be — 126 — defrayed, this mode must be followed; ownership and control, except in the municipality, would be inconsistent with its terms, and an ordinance attempting to do otherwise was void. They further contend that as the appellee had no lawful right at any time to place any of its pipes in the streets and alleys of the city, or operate sewers therein, as under our statutes no such right could be conferred upon it, it was at all times a trespasser, and upon account thereof the sewer pipes became a part of the realty and are the property of the city for the use and benefit of its inhabitants. It is contended by the appellee, first, that'under the seventh subdivision of the seventh power of § 4403 of Mills ’ Annotated Statutes the power exists in the city council to grant the permits under which it operates; that the Weaver case, supra, being a construction of the tenth subdivision only, did not undertake to construe the other subdivisions; that if it did there would only be a defective power in the city to make the grant; that in such case the corporation having made it should be bound by it, having the benefit and having induced a party, relying on its promise, to spend money and perform its part by the execution of its contract, and to continue to do so for many years; that a court of equity may .mold its decree to the same and under like conditions, and that the city should be estopped, from attempting to interfere with this right. The further contentiqn is made, that the sewer is a private system, constructed principally for the benefit of its stockholders, in that all use is allowed by contract only; that no effort is made to force any one to connect with it, and that for these reasons it is not prohibited by the statutes; that it has an absolute right to continue the operation of its plant in the streets and alleys of the city, and to excavate therein for the purpose of making repairs, — 127 — as well as to disconnect all users who refuse to pay the schedule rates for such service. The judgment in this case was final. The parties to it are different from those to the quo warranto suit, and, according to- the language of the judgment here, it is to remain in force forever with the one proviso “that it shall not be taken to interfere with the trial or adjudication of any rights between the parties hereto in the quo luarranto action.” The appellee, plaintiff in this suit, did not mention in its petition the existence of the quo warranto suit. The prayer was for a recognition of its alleged legal rights, and for an injunction allowing it to continue operating its plant in the streets and alleys of the city in the manner desired by it, perpetually. We know of no way that the appellants could have this judgment reviewed other than by appeal from it, or by writ of error. If it was intended to be purely interlocutory, and only reviewable in connection with the final judgment in the quo warranto action, to which the city and other appellants were not parties, and had the appellee so desired, it was its duty to have asked the court to have brought into that case all necessary parties, and having all the parties in the suit in which the final judgment was to- be entered, there to have secured such temporary relief as it was entitled to, instead of bringing this suit. Not having done so, we do not think it can be heard to complain of a review of the final judgment in this action. In Vickery v. Wilson et al., 40 Colo. 490, it was held that the legislature, by the enactment of sec. 289 of our Civil Code, provided a special remedy by which the validity of a franchise may be tested (if any is in dispute); the appellants having plead and the record fully showing the pendency of such an action undetermined. The only questions necessary — 128 — to be determined here, in order not to encroach upon the questions involved in the quo warranto suif, is, was the appellee entitled, in an equitable proceeding (instituted after the pendency of the quo wdrrcmto suit) to have the city and its officials restrained from preventing the appellee from excavating in the streets and alleys of the city for the purpose of enforcing payment by its patrons for the use of its sewer service, or for the purposes of keeping the sewers in proper repair as a going plant, by the allegations in its pleadings that the city was bankrupt (though no such claim was' made against the individual defendants) and that appellee would be put to a multiplicity of suits, would suffer irreparable damage, etc.! The authorities seem to concur in saying that a writ of injunction should never be issued against a municipal corporation unless the right and power are free from doubt, Denver City Ry. Co. v. Denver, 2 Col. App. 34, and that courts of equity will not usually exercise jurisdiction in case of private nuisance or disturbance of easements, where the right of the claimant is disputed and is not clear, until he has established his claim in an action at law.—Rhea v. Forsyth, 37 Pa. St. 504. In the case of Adams et al. v. Cronin, 29 Colo. 488, which involved the enforcement of a city ordinance concerning intoxicating liquors, this court held, “that only in extreme and exceptional cases should a court of equity interfere with municipal authorities in the enforcement of such ordinances.” The conclusion must follow that a court of equity should not interfere with the officials of a city in their alleged efforts to protect the public health, except where the right of the applicant is free from doubt, and then only in an extreme and exceptional case. Hence, was the right and power of the appellee to — 129 — excavate in the streets and alleys of Leadville, for the purpose of disconnecting patrons who refuse to pay for such service, free from doubt (it not having been established in an action at law) and if it was, did it present such an extreme and exceptional case that a court of equity should interfere? The city -claims the digging up of its streets to disconnect private citizens from the further use of such sewer pipes endangers the public health. It also claims the appellee failed to repair its main sewer when it became clogged, which was the reason it proceeded to make such repairs. The record shows that the city offered to allow appellee’s employees, under the supervision of the mayor, to keep the sewers in repair pending the final disposition of the quo toarranto suit and in case the city was successful in securing title to the sewers it was to bear the total of such expense. Waiving any expressions upon the matters triable in the quo ivarranto action, or what was or was not decided in the Weaver case, supra, or what construction is proper to be given to the sundry sections of the statute affecting the alleged rights of the appellee, or whether the sewer is a private or public one, it must be conceded that under the forty-eighth subdivision of § 4403, Mills’ Ann. Stats., the city has the right, as there stated, “to do all acts and make all regulations which may be necessary or expedient for the promotion of health or the suppression of disease,” and that both the seventh and tenth subdivisions of said sec. 4403 reserve to the city the right to regulate the openings in the streets and alleys for the laying, building and repairing of sewer pipes, which reservations, together with its power to protect the public health, as well as its general control over its streets and alleys, considering the fact that there was no other sewer to connect with, thus — 130 — tHe necessity for the protection of the public health, certainly gave to the city the right, temporarily at least, to prevent the digging up of its streets and alleys to disconnect private users who refused to pay during the pendency of the quo warranto suit, regardless of who is right in that action, and this record does not present such an extreme and exceptional' case as calls for the interference of a court of equity in that respect, and it was not justified in granting a mandatory injunction allowing the appellee to dig up its streets and alleys for the purpose of enforcing such collections. No contractual relation between the appellee and its patrons is involved here; they are not parties to the suit and there is nothing in the record which shows there were any contracts or ever had been between the appellee and any of its patrons whereby they consented to allow their sewerage connection to be cut off upon the nonpayment of rent, and no such contention is made by the appellee that any such contracts existed, or that there was any understanding to that effect, and there is no expressed or implied .assumption that the city, by contract or otherwise, ever consented or agreed at any time to allow any consumers to be disconnected in its streets or alleys which would be injurious or detrimental to the public health. In fact, the record shows that there was no contract at all between the appellee and the city concerning these matters. By granting the permit to construct the sewers, the city received nothing, the appellee promised nothing. After the permits were granted, the appellee having made no promise or agreement, need not have constructed any sewers at all; while the plea of estoppel, if sustained, would entitle the appellee to all the privileges of a perpetual franchise (including the perpetual right of digging up the streets to disconnect consumers); rights which — 131 — the legislature itself could not grant, being contrary to the provisions of art. 2, § 11, of our bill of rights, which provides, ‘ ‘-that no * * * law * * * making any irrevocable grant of special privileges, franchises or immunities, shall be passed by the General Assembly. ’ ’ It is true as held in former cases of this court, the last being that of Colorado Springs v. Colorado City, 42 Colo. 75, that as applied to contractual rights estoppel applies to a municipality with the same force and effect that it does to individuals; but this is limited to cases in which the city had the right to make the contract in the first instance, and in the case just cited it was expressly held “it was within the power of Colorado Springs to make such a contract, and her plea 'of ultra vires must be rejected.” But no case in this court, as we understand, goes to the extent of holding that the rule that both parties to an ultra vires contract are in pari delicto, applies to municipal corporations, but the rulings in this jurisdiction have always been to the -contrary.— Town of Durango v. Pennington, 8 Colo. 257; Smith Canal or Ditch Co. v. City of Denver, 20 Colo. 84; Sauer v. The Town of Gillett et at., 20 Col. App. 365; Sullivan et al. v. City of Leadville, 11 Colo. 483; The People ex rel. v. May, 9 Colo. 80. If the rule were otherwise then all statutory and constitutional restrictions upon the authority of municipal officials could, under certain conditions, be avoided.by the plea of estoppel. The former rulings of this court appear to have received the approval of the great weight of authorities.—State ex rel. v. Murphy, 31 S. W. (Mo.) 784; Trester v. City of Sheboygan, 58 N. W. (Wis.) 747; Dullanty v. Town of Vaughn, 45 N. W. (Wis.) 1128; Cedar Rapids Water Co. v. City of Cedar Rapids, 90 N. W. (Ia.) 746; Bangor Township et al. v. Bay City Co., — 132 — 110 N. W. (Mich.) 490; Packard v. Rayes et al., 51 Atl. (Md.) 32; City of Eufaula v. McNab, 67 Ala. 588; Logansport Ry. Co. v. City of Logansport, 114 Fed. 688; Davis v. The Mayor, etc., of New York, 14 N. Y. 506; Ashland v. C. & N. W. Ry. Co., 105 Wis. 398; Cleveland v. Cleveland Ry. Co. et al., 93 Fed. 113; Underground R. R. Co. v. City of New York, 116 Fed. 952; Rice v. C. B. & N. Ry. Co., 30 Ill. App. 481; Commonwealth v. Erie R. R. Go., 27 Pa. St. 339. It follows that the city council, in the first instance, having no authority to grant such permission for the disconnection of private consumers to the injury of the public health, no act of its officials by acquiescence therein for a great many years, or otherwise, will estop it from denying to the appellee the right to continue the use and enjoyment of such a privilege. ’Tis true, some citizens refused to pay, hut serious contentions existed. The city claims ownership to the property for the use of its inhabitants; it claims the appellee had no right to continue its use, and in this claim it appears to have the support of our court of appeals in the Weaver case, supra, if applicable. A quo warranto suit had been instituted; the feeling was evidently hitter. Under these conditions a court of equity was not justified in doing anything further than preventing a destruction of the property and keeping matters in statu quo during the pend-ency of the other action. "We think the requirements of the city that the repairs he made under the supervision of the mayor, or any other officer to he selected by it, a reasonable regulation under the conditions shown to exist here. ’Tis true, it is claimed that the city, by the passage of the resolution and by the actions of its officials, caused a large number of appellee’s patrons — 133 — to discontinue payment and without the right to disconnect them it would result in irreparable damage to appellee, a multiplicity of suits, etc. The only evidence to that effect, other than the passage of the resolution, being the evidence of the vice-president and general manager of appellee, who testified that he recently asked four property owners for rent and the substance of the conversation was they said ‘ ‘ city was going to protect them and they would not pay.” No evidence was offered to show that any of the appellants, the officials of the city who' committed the acts complained of, were insolvent, and the evidence offered as to the city’s financial condition was insufficient to show, that it could not'respond in damages for any temporary .loss occasioned to the appellee, if it is right in its contention that it had a lawful right to continue its use and enjoyment of the streets, which it would be compelled to establish before it could recover as against the city, and the showing made was certainly insufficient to establish any irreparable damages, and not sufficient under any line of reasoning to overcome the city’s duty to protect the public health of -its inhabitants. The actions of the city in the passage of the resolution and its attempts to enforce it could in no way prevent the appellee from instituting suits against its patrons for the enforcement of all legal rights (if any) which it had under its contracts. The effect of preventing it temporarily from disconnecting private consumers in the streets and alleys of the city for sanitary purposes is not the taking of property without due process of law, but is simply declaring the manner in which it shall operate and maintain this property in the streets and alleys, which unquestionably belong to the city; the only right claimed by the appellee is a privilege or easement to' — 134 — enjoy the nse of its property (to wit, its sewer pipes) in the streets and alleys, which privilege had never yet been sanctioned by the dignity of an ordinance. That a man can do with his property as he pleases at all times is subject to many qualifications, in all civilized nations. Inasmuch as the city disclaims any intention of attempting any destruction of the property, or of doing anything more than that which would be necessary to maintain its sanitary condition during the pendency of the quo warrcmto suit, such act could not affect the rights of the appellee upon its contracts, if they were otherwise enforceable. No evidence was offered tending- to show that any patron of the appellee was insolvent, unable to pa.y or refused to pay for any other reason than that the appellee had no right under the law to continue to operate its plant and collect revenue therefor in the city, which position was also taken and sanctioned by the city, relying upon the ruling in the Weaver case, swpra, decided by our court of appeals. Suppose the contention was upon the rate question and a large number of citizens refused to pay the rates demanded, claiming they were prohibitive, yet that upon account of sanitary conditions it was necessary that their properties have the use -of the sewers, would any court hesitate in such a case, pending a determination of that question under proper conditions, to prevent such disconnection until the matter was finally disposed of? Besides, one of the most forceable arguments presented by counsel for appellee in justification of the original construction of this sewer by a' private corporation, in the manner it was done, as well as its future maintenance under these conditions, was the great necessity for the protection of the public health and that it was necessary to have connected with this, sewer system some of the very properties — 135 — which it is now seeking to disconnect, over the protest of the officials of the city, and which the injunction granted to it by the lower court expressly allowed it to do for an indefinite period in the future, or at least until the rights of. the parties are determined in the quo warrcmto proceeding, which suit, although instituted prior to the bringing of this action, it ^as admitted at the time of the first oral argument here of this cause was not then at issue in the lower court, but pending a settlement of the pleadings; which action it is to be regretted could not have been speedily tried soon after its institution so as to have avoided any danger to the public health or delay in the disposition of the important questions therein involved. It is proper to state that prior to the apparent truce in connection with this matter, since the records were lodged in this court pending a hearing upon an application to modify the injunction, which was filed here December 12, 1908, it was. alleged in that application and stands undisputed that the appellee was then actively engaged in disconnecting and attempting to disconnect the laterals of about seventy private consumers from the main sewer system, so that the persons thus cut off and their premises are, and would be, left without any sewer facilities. It is not necessary for this’Court to be told, under such conditions in a city like Leadville, considering its location, etc., that the result would thereby endanger not only the health of the persons so cut off, but also, to a great extent, the health of the inhabitants of the entire city. It was also alleged and supported by affidavits, which stand undisputed, that there then existed in the city of Leadville contagious and infectious diseases which would be, and are, encouraged in their spread by the unsanitary conditions which would — 136 — occur by the actions of the appellee if allowed to continue in the disconnection of such inhabitants and in prohibiting those disconnected from being reconnected. It was further alleged and stands uncontradicted, that since the rendition of said decree, without securing permits from the mayor and city council as by ordinance required, the appellee began to dig up the streets and make excavations therein in violation of the terms of the ordinances of said city for the purpose of disconnecting certain users of the sewers under the claim that the decree and injunction issued in the above entitled cause gave it the right and power so to do. It is proper to state further that since this action was lodged in this court its files show that on or about December 12, 1908, the state of Colorado and the state board of health, through the then attorney general, appeared in this behalf and called the attention of this court to the threatened unsanitary condition of the city of Leadville on account of the controversy involved herein and that the same became and was a menace to the public health of that city, and they joined in the request that time be shortened for briefs and that the case be advanced to the earliest possible hearing and determination. The record further shows that on March 4, 1909, the state of Colorado and the state board of health, by the then attorney general, for the reasons above stated, again appeared and joined in the request and motion that the cause be advanced to a speedy hearing. So that in addition to the officials of the city we have these departments of the state at two different times, through two attorneys general, appearing and praying for a speedy determination of the controversy upon account of the sanitary conditions at — 137 — Leadville and the great danger threatening the public health there. We do not understand it to be the intention of the city to assume jurisdiction and ownership over this property at this time for the purposes of collecting the revenues to be derived from its use, or that there is any serious contention involved necessary to be determined here, other than the right of the city to prevent the digging up of its streets and alleys by the appellee, for the purpose of disconnecting private users in order to enforce its collections. But the record discloses that the city refused to allow the appellee to complete its repairs to the sewer pipes after it had begun them, although they were finished by the city prior to the issuance of the temporary restraining order. However, the resolution passed by the city council in effect denies to the appellee the right to make any excavation for any purpose for repairs, or to keep it in a sanitary condition, even pending the disposition of the quo ivarrcmto .suit. The appellee has been operating the plant for a long time, a portion of it for about twenty-two years, with the knowledge and consent of the city, which recognized there was a difference of opinion existing between the parties as to both the law and the facts by having caused to be instituted the quo warrcmto action to have the alleged rights of the appellee declared void, and wherein the city lays claim to the pipes and the right to their future use. Under such circumstances, assuming the city is right in its entire contention (regarding which no expression is intended to be given here), having caused the qm warranto proceeding to be instituted it would not now be justified in taking possession of the property by force for the purpose of its operation, and was not justified in attempting to prevent the appellee from keeping it in — 138 — repair (under proper regulations) during the pend-ency of the quo warranto suit which it had instituted to test this right, among other things, even though it was willing to do this work itself, unless the appellee continued to fail to do so to the extent of endangering the public health. For the reasons stated the judgment will be reversed in part, modified and extended as follows : To the end, therefore, that this property, and the present relations thereto of the parties now engaged in controversy over it, shall, as nearly as possible, be held in statu quo, it is ordered that the injunction heretofore issued in this cause be modified as to the appellant, the City of Leadville, and extended to- the appellee, The Leadville Sewer Company, in the manner hereinafter provided, until the rights of the respective parties concerning the property be finally determined, in the quo warranto suit now pending for that purpose in the district court of Lake county, or in some other appropriate action; that is to say, it is ordered that the said the City of Leadville be, and it hereby is, restrained and enjoined from taking or attempting to take jurisdiction over or possession of said property, or of any part or portion thereof, for the purpose of operating the same and collecting revenue therefrom, and from removing or destroying the same, or in any way interfering with said company in its operation thereof, except to regulate the manner of such operation for the protection of the public health; that said sewer company be, and it hereby is, restrained from disconnecting any user of the sewers for the purpose of enforcing rent collections ; that it also be, and hereby is, restrained from making any excavations or openings in the streets or alleys of the city in connection with the operation and conduct of the sewers, except where it is necessary to be done to repair, maintain and preserve it — 139 — as a going plant, and then only under such reasonable regulations as may be imposed by the city authorities for the protection and ^reservation of the public health. It is further ordered that the appellee pay the costs of this appeal and that each party pay its own costs in the trial court. Reversed in part, modified and extended. Decision en banc ■ Mr. Justice White and Mr. Justice Bailey concur specially in the final order. Mr. Justice Campbell and Mr. Justice Gabbert dissent. _