Mayor and Aldermen of the City of Vicksburg v. Vicksburg Waterworks Company (206 U.S. 496)

Statement by Mr. Justice Day: Cases involving the rights of the Vicksburg Waterworks Company, under the contract made between the city of Vicksburg and the company, for furnishing the water supply of the city, have been before this court in two preceding actions, viz.: Vicksburg Waterworks Co. v. Vicksburg, 185 U.S. 65, 46 L. ed. 808, 22 Sup. Ct. Rep. 585, and 202 U.S. 453, 50 L. ed. 1102, 26 Sup. Ct. Rep. 660.

Owing to the previous statements of the case, it is only necessary to set out enough of the facts involved in the controversy now before us to make plain the conclusions at which we arrive.

The city of Vicksburg, by act of the legislature of Mississippi (Laws of 1886, chap. 358, § 5, p. 695), was authorized 'to provide for the erection and maintenance of a system of waterworks to supply said city with water, and to that end to contract with a party or parties, who shall build and operate waterworks.'

Acting under this authority conferred by the legislature, the city of Vicksburg made a contract with Samuel R. Bullock & Company, their associates and assigns, for the supply of water to the city and its inhabitants, which was contained in the ordinance of November 18, 1886, § 13 thereof providing that—

'The said Samuel R. Bullock & Company, their associates, successors, or assigns, shall have the right to make all needful rules and regulations governing the consumption of water, the tapping of pipes, and general operation of the works, and to make such rates and charges for the use of said water as they may determine, provided that such rates and charges shall not exceed 50 cents for ac h thousand gallons of water.'

The ordinance, by its terms, ran for thirty years, and Bullock & Company, as provided in § 5 of the ordinance, assigned the contract to the Vicksburg Water Supply Company, and it was duly accepted by that company. The supply company put in the works and operated until August, 1900, when the mortgage upon the property, including all the franchises and contract rights, was foreclosed and purchased by a Mr. Crumpler, who assigned all his rights and title to the Vicksburg Waterworks Company, the appellee herein, which company has operated the works since.

The contract contained an agreement to pay a stipulated rental for certain hydrants for public use.

The legislature of Mississippi, on March 18, 1900, passed an act authorizing the city to issue bonds and build a waterworks system of its own for the supply of the city and its inhabitants, and on the 3d of July, 1900, an election was held in the city under the statute, which resulted in a vote to build or buy a waterworks plant of its own.

The city repudiated any contract relations with the company. Thereupon the company filed its bill in the United States circuit court for the district of Mississippi on the 14th day of February, 1901, the objects of which were thus stated by Mr. Justice Shiras, in delivering the opinion of the court (185 U.S. 65, 46 L. ed. 808, 22 Sup. Ct. Rep. 585):