El Paso Water Company v. City of El Paso

Statement by Mr. Justice BREWER:

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, Tex., 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 15 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 15 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.

M. McKeag and W. B. Thompson, for appellant.

Walter D. Davidge and Leigh Clark, for appellee.

Mr. Justice BREWER, after stating the facts in the foregoing language, delivered the opinion of the court.