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SHAWNEE SEWERAGE AND DRAINAGE COMPANY v. STEARNS

decided: April 10, 1911.

SHAWNEE SEWERAGE AND DRAINAGE COMPANY
v.
STEARNS, AS MAYOR OF THE CITY OF SHAWNEE.



APPEAL FROM THE CIRCUIT COURT OF THE UNITED STATES FOR THE WESTERN DISTRICT OF OKLAHOMA.

Author: Mckenna

[ 220 U.S. Page 463]

 MR. JUSTICE McKENNA delivered the opinion of the court.

It is contended that this case involves the construction or application of the Constitution of the United States, and that therefore the appeal has been taken directly to this court from the Circuit Court.

The appellant, we shall call it the Drainage Company, is a corporation organized under the laws of Oklahoma; the appellees are the mayor, clerk and the members of the city council of the city of Shawnee, a municipal corporation. The Walter Newman Plumbing Company and Walter Newman are also appellees.

A summary of the facts as presented by the bill is as follows: The city of Shawnee, a city of the first class under the laws of the Territory of Oklahoma, granted by an ordinance (No. 228) to De Bruler-Newman & Company, their successors and assigns, the right, for the period of fifty years, to build and maintain a system of sewerage, with the necessary branches and appurtenances essential to the same, "along certain lines" in the city. It was provided that the city should have the right to purchase the system at the expiration of a period of fifteen years, at the exact cost of its construction. And further, that if the city did not desire to make the purchase the ordinance should run for fifty years. There was a time fixed for the commencement and completion of the system.

The ordinance was amended by a subsequent ordinance (No. 241) by making the term of the right twenty-one years and ratifying all the other provisions of the first ordinance.

On the first of February, 1902, De Bruler-Newman & Company assigned their rights under the ordinance to the

[ 220 U.S. Page 464]

     Drainage Company. The assignment was ratified by the city by an ordinance (No. 242) passed February 26, 1902, and the Drainage Company authorized to mortgage the rights and properties in a sum not exceeding $25,000.00. The ordinance also provided that the city should have the right to purchase the system at the exact cost of its construction or any extension of it after the expiration of fifteen years.

De Bruler-Newman & Company commenced and continued the construction of the system until the assignment to the Drainage Company as above stated, and after the assignment the Drainage Company conducted its construction "and extended its mains and laterals over and throughout the limits" of the city and expended and invested therein $40,000.00, and issued its bonds and notes in pursuance of ordinance No. 242 and secured the sum by a mortgage on the property and franchises. The company performed its duties to the city, met all of the demands for sewerage purposes, and carried out the terms and conditions of the ordinance until the twenty-second of December, 1906, at which time it sold and transferred its main line to the city. The company is the owner of the rest of the property which is of the value of $30,000.00 and which is regularly assessed and pays to the city its just property taxes.

On the first of December, 1901, the city passed an ordinance providing that wherever the system was extended "all over ground closets should be declared a public nuisance," but after the company had extended the system the ordinance was repealed, and the city has habitually and systematically discouraged, and by divers means has attempted, to impair the investment of the company.

On the sixth of November, 1906, after certain proceedings had, a question was submitted to the voters of the city whether bonds should be issued in the sum $165,000.00 for the construction of a sewer system, which was duly

[ 220 U.S. Page 465]

     carried. The Drainage Company then commenced a suit in the District Court of the county to enjoin the city from constructing and maintaining a sewer system in the city without having purchased the company's system or compensated it therefor, which suit was regularly tried and a decree rendered that the company had a legal and valid franchise, and that it "was authorized by such franchise to carry on the business of operating the said system of sewerage," and that the construction and operation of a sewer system by the city in the immediate vicinity of the company's system would confiscate its property and depreciate the value of the bonds thereon. The city was enjoined from constructing its system until the company's main sewer should be condemned or purchased by it, and, in the event that it should condemn or purchase the main sewer, the mayor and councilmen were enjoined from preventil the company "from connecting with any main sewer of the said defendant (the city) free of charge and to use the same by such connection with the district sewers and laterals" belonging to the company in operation at the date of the rendition of the decree.

The legality of the election at which bonds were authorized to be issued by the city to the amount ...


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