Washburn Water Works Co. v. City of Washburn

Keewist, J. The material facts in this case are covered by the findings heretofore stated. The controlling questions involved are: (1) Whether the defendant city assumed the contract of the town with the plaintiff; and (2) whether fifty-five per cent, of the judgment in favor of the town and against the plaintiff should be set off against the claim made for hydrant rentals. As appears from the findings of fact, the contract of the plaintiff with the town was in fact for the benefit of the inhabitants of the unincorporated village which after-wards became the incorporated city of Washburn, defendant in this action; the waterworks plant was constructed wholly within the territory comprising the city of Washburn, and — 78 — since its incorporation plaintiff has continued to furnish it and its inhabitants with water according to contract, the town deriving no benefit whatever from the waterworks plant; the city ■of Washburn and its officers and the plaintiff have assumed that the relations between plaintiff and defendant were governed by the terms of the ordinance, and that the city succeeded to all the rights and liabilities of the town under such ordinance from and after the date of the incorporation of defendant; at the time of incorporation the population of the .■city of Washburn was 5,000 and that of the town 500; and the valuation of the property of the city of Washburn was greater ■than the valuation of the property in the town. It is claimed, however, by appellant that, the contract being with the town, the city did not become liable upon it, on the ground that, when the territory embraced within the limits of the defendant city became detached from the town and formed into a separate municipality, no liability followed the new creation. The case made here is not within the rule contended for by the appellant. No part of the waterworks plant remained in the town after the incorporation of the defendant. The town had no supervision over it, nor was it in any manner interested in it. It was retained, managed, and controlled solely for the benefit of the city and wholly within its limits. It was constructed for the benefit of the inhabitants of the unincorporated village of Washburn, and afterwards continued for the benefit of such inhabitants under their organization .as the city of Washburn. The appellant does not, as we understand his position, contend that the town is still liable, or that the plaintiff’s claim could be enforced against the town; but it is insisted that the case is one where by operation of law it has become impossible for the parties to the water contract to perform, and that, where performance of a contract becomes wholly or in part impossible by reason of change in the» law, the contract is to that extent discharged. We think it ■very clear that the contract has not been extinguished or ren — 79 — dered incapable of performance, but is still a valid, subsisting obligation, and the question bexe is whether it is enforceable against the defendant. While it was made in form with the "town, it was in fact made for the benefit of the inhabitants of the unincorporated village situate within the limits of the town, and continued to be performed under the supervision of the town, for the benefit of such village, until the incorporation of the defendant city. The city of Washburn and its inhabitants are solely benefited by the supply of water. They .alone are interested in the execution of the contract; they .alone receive the benefits and should in equity and good conscience bear the burdens. National F. & P. Works v. Oconto City W. S. Co. 105 Wis. 48, 81 N. W. 125; Mount Pleasant v. Beckwith, 100 U. S. 514. It is not necessary to decide here, and we do not decide, whether the town remains liable upon the contract. The history of legislation on this subject, we think, clearly shows that it was the intention of the legislature that cities incorporated under the established facts in this case should succeed to the rights, privileges, and liabilities of such contracts. Oh. 292, Laws of 3883, confers upon town boards in towns containing one or more unincorporated villages, having each a population of not less than 1,000, the powers relating to villages and conferred upon village boards by the provisions of ch.. 40, R. S. 1878, and acts amendatory thereof, excepting those the exercise of which would conflict with the provision of law relating to towns and town boards, and makes them applicable to such unincorporated village or villages in such town, and may be exercised when directed by a resolution of the qualified electors of the town. The power to make the contract in question was conferred upon the town because it contained an unincorporated village of not less than 1,000 inhabitants, and obviously for the purpose of giving the unincorporated village within the limits of the town the same advantages as an incorporated village; the , needs and neces — 80 — sities of such unincorporated village necessarily requiring the exercise of governmental powers somewhat different from the ordinary township community, especially in regard to police regulations, facilities for the extinguishment of fires, and care and improvement of streets. Land, L. & L. Co. v. Brown, 73 Wis. 294, 40 N. W. 482. A franchise or contract to construct waterworks can he conferred only through authority delegated from the state. Allen v. Clausen, 114 Wis. 244, 90 N. W. 181. It is grossi public in its nature. State ex rel. Att'y Gen. v. Janesville W. Co. 92 Wis. 496, 66 N. W. 512. Sec. 925—8, Stats. 1898, regarding the incorporation of cities, provides, among other things, that 100 or more electors- and taxpayers of any village, incorporated or unincorporated, may apply by petition to the trustees of said village or to the proper town board to have the question of incorporating said village, or the same and adjacent territory, containing together a population of not less than 1,500, as a city, submitted to a vote of the electors of the territory described in the petition. Subsequent sections provide for the submission of the question of incorporation to a vote of the electors residing within the limits proposed and for the perfecting of such incorporation. The legislative scheme, therefore, obviously was to give unincorporated villages the right to secure and maintain waterworks within their limits under the supervision of the town board, the same as incorporated villages under-village boards. The legislature doubtless had in view that the unincorporated village would form a nucleus for an incorporated village or city, and that waterworks constructed by contract under such legislative authority for the benefit of inhabitants of an unincorporated village should pass to the-village or city organized by such inhabitants in the manner provided by statute. It is contended on the part of the appellant that at common law, upon division of a town, whether by creating a new town or a city out of a part of the old town, the old town retained — 81 — all the property and was liable for all indebtedness. But tbe power to divide municipalities is strictly a legislative power, and tbe power to prescribe tbe rule by wbicb a division of tbe property of tbe old municipality shall be made is incident to tbe power to make such division, and is in its nature legislative. Sucb division must rest upon tbe circumstances of each case. Bristol v. New Chester, 3 N. H. 524; Laramie Co. v. Albany Co. 92 U. S. 307; Knight v. Ashland, 61 Wis. 233, 21 N. W. 65. The doctrine upon wbicb tbe division of property of municipalities is founded is an equitable doctrine resting upon tbe relative rights of tbe municipalities, tbe character of tbe property to be divided, and legislative regulation upon tbe subject. Bloomfield v. Glen Ridge, 54 N. J. Eq. 276, 33 Atl. 925; Schriber v. Langlade, 66 Wis. 616, 29 N. W. 547, 554; Knight v. Ashland, supra; Broughton v. Pensacola, 93 U. S. 266. We have been cited by counsel on either side to no case precisely in point upon tbe main question before us, nor have wo be'en able after much research to find any. But we think tbe principle enunciated in some of tbe cases cited sustains tbe liability of tbe defendant upon tbe facts established here. As we have already seen, tbe contract for waterworks and the construction thereof within the limits of tbe unincorporated village was for tbe benefit of the inhabitants thereof, and continued to be after incorporation of tbe defendant city. In municipal corporations it is tbe inhabitants and tbe territory wbicb form tbe essential elements of tbe corporation, and where they are tbe same, or substantially tbe same, it will be presumed that the legislature intended a continued existence of tbe same corporation, although different powers are possessed under tbe new charter and different officers administer tbe affairs of the municipality. And, in the absence of express provision to tbe contrary, it will be presumed that tbe legislature intended tbe liabilities as well as tbe rights of property of tbe corporation in its old form should accompany tbe — 82 — corporation in its re-organization. Broughton v. Pensacola, supra; Higginson v. Turner, 171 Mass. 586, 51 N. E. 172. In O'Connor v. Memphis, 6 Lea, 730, 735, it is said: “Neither the repeal of the charter of a municipal corporation, nor a change of its name, nor an increase or diminution of its territory or population, nor a change in its mode of government, nor all of these things combined, will destroy the identity, continuity, or succession of the corporation, if the people and territory re-incorporated constitute an integral part of the corporation abolished. The reason is to be found in the peculiar nature of such corporations. A charter for municipal purposes is an investing of the people of a place with the local government thereof, constituting an imperium in imperio, and the corporators and the territory are the essential elements; all else being mere incidents or forms.” And in Mobile v. Watson, 116 U. S. 289, 6 Sup. Ct. 398, it was held in effect that where the legislature of a state has given a local community living within the designated boundaries a municipal organization, and by subsequent acts repeals its charter and dissolves the corporation and incorporates substantially the same people under a new name for the same general purposes, and the great bulk of the taxable property of the old corporation is included within the limits of the new, and the property of the old corporation used for public purposes is transferred without consideration to the new for the same public uses, the latter, though greatly reduced in corporate limits, is the successor of the former and liable for its debts. To substantially the same effect are Mount Pleasant v. Beckwith, 100 U. S. 514, and Girard v. Philadelphia, 7 Wall. 1. We think the principle of the cases cited and many others which may be found applies here. True, the corporate existence of the town continued after the organization of the city out of its territory. But the inhabitants of the unincorporated village, for whose benefit the contract was made, continued the inhabitants of the city. It is said by counsel for appellant that, where one corporation goes out of existence by — 83 — being annexed to or merged in another, no arrangement being made respecting tbe payment of the liabilities of the former, the latter will be entitled to all the property and be responsible for the liabilities; but it is insisted that the town of Washburn has never been dissolved, hence this rule does not apply. The situation, so far as the unincorporated village of Washburn is concerned, is the same as if the town had gone out of existence by merger or otherwise, since it has no further interest in the execution of the contract. The town is not concerned in the waterworks property, and can exercise no supervision over it or derive any benefit from it, and the rights of the inhabitants of the city of Washburn under the ordinance, if enforced at all, must be by the defendant city as the successor of the town. Bloomfield v. Glen Ridge, 54 N. J. Eq. 276, 33 Atl. 925; Curtis v. Board of Education, 43 Kan. 138, 23 Pac. 98. The findings of fact respecting the assumption of the contract by the defendant are fully supported by the evidence. The plaintiff continued to furnish water after the incorporation, and the city received it without objection, repeatedly acknowledged the existence of the contract, acted upon it through its officers, and treated it as a valid and existing obligation between the plaintiff and defendant. We conclude that the defendant city is bound by the contract or ordinance in question. 2. Counsel for appellant further claims that fifty-five per cent, of certain judgments recovered by the town of Wash-burn against the plaintiff should be offset against the plaintiff’s claim in this action; but they fail to point out in their briefs upon what ground the same should be made, -and we are unable to discover from the record any ground which would warrant such offset. The court below obviously disregarded this claim of appellant, and we find no error in this respect. We are of the opinion that the judgment of the court below is right and should be affirmed. By the Court. — The judgment of the court below is affirmed.