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NEW ORLEANS v. NEW ORLEANS WATER WORKS COMPANY. CONERY V. NEW ORLEANS WATER WORKS COMPANY.

decided: December 14, 1891.

NEW ORLEANS
v.
NEW ORLEANS WATER WORKS COMPANY.

CONERY
v.
NEW ORLEANS WATER WORKS COMPANY.



ERROR TO THE SUPREME COURT OF THE STATE OF LOUISIANA.

Author: Brown

[ 142 U.S. Page 84]

 MR. JUSTICE BROWN, after stating the case, delivered the opinion of the court.

In order to sustain the jurisdiction of this court upon the ground that a Federal question is presented, it should appear either that such question was apparent in the record, and that a decision was made thereon, or that, from the facts stated, such question must have arisen, and been necessarily involved in the case. If it appear either that the decision of the state court was made upon rules of general jurisprudence, or that the case was disposed of upon other grounds, broad enough in themselves to sustain the judgment without considering the Federal question, and that such question was not necessarily involved, the jurisdiction of this court will not attach.

(1) Was there a Federal question involved in this case? None such appears upon the face of the bill, the basis of which is a conflict between the act of 1884, and the ordinance and contract thereunder and the constitution of the State. Four clauses of the constitution are cited, all of which this act is alleged to violate; but in none of them is there a suggestion of a conflict with the Federal constitution or laws. On May 27, 1887, the city of New Orleans filed a brief answer to the bill denying, all and singular, the allegations therein contained, etc., and praying judgment against the plaintiffs' demand. On November 3, 1888, without withdrawing its first answer, it filed an amended or supplemental answer, in which it assumed an entirely different position, averring that by the terms of the act of 1877 the city was entitled to its supply of water free of charge, "and that the guaranty of this law to the city, securing to it the benefits of free water, has not been and cannot be diminished without impairing the obligation of contracts, and thereby violating Article 1, section 10 of the Constitution of the United States;" and that the ordinance No. 909 was an attempt to frustrate and set at naught the terms of the act of 1877.

[ 142 U.S. Page 85]

     The second answer further proceeded to allege the illegality of the contract of October 3, 1884, also of the ordinance No. 909, which was charged to be in direct violation of the act of 1884; and that the decision of the Supreme Court gave a judicial construction to section 11 of the act of 1887, and determined the effect of the legislative contract between the city and the Water Works Company by virtue of the act of 1877, and declared that the latter, under said contract, had no power to demand or require from the city of New Orleans in any year any sum for the water supply, which it was bound under its charter to furnish to the city, greater than the amount of the city taxes for that year.

The answer, in its further averments, is a substantial iteration of the charges made in the bill, and sets forth that in case the courts should decide that the act of 1884 did authorize the city and the company to enter into a new contract, stipulating the value of the water to be supplied, the act itself was unconstitutional, in that it violated no less than six articles of the state constitution.

The District Court, in giving its reasons for judgment, held that, notwithstanding the act of 1884, the obligation of the company to furnish the water supply still subsisted, subject only to the qualifications that compensation equal in amount to the taxes exacted might be claimed; and that, in requiring the city to pay for all the water it received, (in the event of its demanding the tax,) and in providing specially that, unless it set apart a sufficient sum to make such payment, the company should not be compelled to deliver water as provided in its charter, the legislature was releasing or extinguishing an obligation which had been ascertained and defined by the Supreme Court of the State, from the Water Company to the city of New Orleans, within the meaning of the State constitutional provision, Article 57, which provided that "the General Assembly shall have no power to release or extinguish, or to authorize the releasing or extinguishing, in whole or in part, the indebtedness, liability or obligation of any corporation or individual to this State, or to any parish or municipal corporation therein." The court, therefore, sustained the prayer of

[ 142 U.S. Page 86]

     the bill and granted an injunction. There was no reference in this opinion to any Federal question.

On appeal to the Supreme Court, the judgment of the District Court was reversed, the majority of the court holding that the decision of the court in the prior case annulling the exemption from taxation contained in section 11 of the act of 1877 did not regulate the contract between the parties for the future as to the price of the water to be furnished by the company, since that would be making a contract for the parties which they never intended, and which was not warranted by any promises in the water works charter; that there was no other section of the act imposing any obligation upon the company to furnish free water to the city for any franchise or privilege granted by the State, and that the city could not impose any obligation upon it contrary to the original grant, without its consent. The court further held that there was no proof in the record of any fraud or undue advantage obtained by the Water Works Company over the city, and that, independent of any statutory provision subsequently enacted, authorizing the city to contract for its water supply, (alluding to the act of 1884,) it had full and plenary power to do so under the provisions of its charter. The court also held that the act of 1884, and the ordinance and the contract made in pursuance of it, violated no provision of the state constitution and were valid. No allusion was made in this opinion to any Federal question.

The Chief Justice, dissenting, was of the opinion that the judgment in the prior suit settled forever the question of the respective liability of both corporations, the one for the water supplied, the other for the taxes demandable; that its effect was to close the door for all time to those litigants on the subject of such reciprocal liability, the one to the other; that the moment it was rendered it became the property of each party, who then acquired the right of using it as an effectual shield for protection against any further demand; that it was designed to establish firmly for ...


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