Petition for Writ of Certiorari — Omaha v. Omaha Water Co.

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Supreme Court of the United States,

THE CITY OF OMAHA,

Petitioner,

VS.

OMAHA WATER COMPANY,

Respondent.

PETITION FOR WRIT OF CERTIORARI.

TO THE HONORABLE THE CHIEF JUSTICE AND ASSOCIATE JUS-

TICES OF THE SUPREME COURT OF THE UNITED STATES,

Your petitioner, the City of Ceiahe. represents that

this is a suit in equity brought by the Omaha Water Com-

pany v. The City of Omaha ix the Circuit Court of U. S.,

for District of Nebraska and appealed to U. S. Cireuit

Court of Appeals for Eighth Cireuit to compel the city to

purchase the entire system of water works of the Omaha

Water Company in Omaha, South Omaha, East Omaha,

Dundee and Florence, for the sum of $6,263,295.49. Said

valuation was the result of an award arrived at under an

election by the city to purchase, but which award was

signed by two of the appraisers and not concurred in by

the third appraiser. The said award was made under a

contract between the city and the Water Company which

the United States Circuit Court of Appeals has adjudged

to be a public as distinct from a private contract.

The matters involved are of great public interest and

importance to the 175,000 people living in said cities and

2

towns, and questions which to many of said citizens are

of grave and serious concern for reasons to be stated.

It is a case which presents questions of law about

which there is serious conflict in the decisions between the

different courts, state and federal, and between the fed-

eral courts. In one turning point in the case the Circuit

Court of Appeals, between these same litigants, has

handed down two opinions inconsistent with each other,

one holding the contract between the city and the Water

Company to be a public contract, and the other holding the

same contract to be a private contract, and on these con-

flicting and contradictory constructions of the said con-

tract, rendered judgment against the city of Omaha in

each case. :

The fundamental and primary objections to the

award are as follows:

(1) That the award is void because not concurred

in by the three appraisers, as required by the terms of

Section 14 of Ordinance 423.

(2) The award is void by reason of misconduct of

the Omaha Water Company and the Board of Appraisers

in secretly and privately examining the books of the

Water Company in the City of Cincinnati, Ohio, more

than a year after the public taking of testimony had been

closed and the case submitted, and which said secret and

ex parte examination of the books of the Water Company

was made against the protest of the City of Omaha and

under and agreement by which the appraisers were to re-

ceive the said evidence and not disclose the same to the

adverse party, and which said books contained material

evidence bearing upon the ‘‘going value’’ of the water

works, and also upon the cost of the construction and the

purchase prices of material, including water mains and

umping engines.

3

(3) That the said award is void in that it includes

extensions of the water works in the outlying municipali-

ties used for the sole purpose of supplying outside munic-

ipalities with water, and which were not constructed un-

der any franchise contract or authority conferred upon

the Water Company by the City of Omaha, and that the

City of Omaha was, and is, without power to appropriate

money, levy a tax or issue bonds to pay for the purchase

thereof.

Your petitioner further represents the material and

important facts to be that in 1880, the City of Omaha by

an Ordinance, No. 423, and amended by Ordinance No.

430, entered into a contract with a predecessor of the

Omaha Water Company for the construction of water

works in the City of Omaha to supply the City of Omaha

with water for fire protection, public and domestic use.

The said Ordinance by Section 14, reserved to the City of —

Omaha the election to purchase the water works at any

time after twenty years ‘‘at an appraised valuation which

shall be ascertained by the estimate of three engineers,

one to be selected by the City Council, one by the Water

Works Company, these two to select a third.’’

In 1903, the City of Omaha, by an Ordinance, elected

to purchase the water works under the said provision of

Section 14 of Ordinance 423, and appraisers were ap-

pointed as provided in said Section 14, to-wit: one by the

City of Omaha, one by the Omaha Water Company, and

these two appointed a third.

The three appraisers organized as a board of ap-

praisers July 20, 1903, and began their sittings in the

City of Omaha as an open, public body, gave notice to the —

respective parties of their meetings, and the respective

parties appeared by their attorneys before the said board

of appraisers and formally produced and examined wit-

4

nesses under oath, and produced documentary evidence,

and such manner of producing and receiving evidence con-

tinued from time to time until the 31st day of December,

1904, at which time the offering of evidence was con-

cluded. The case was then argued orally and upon

printed brief by the attorneys for the respective parties,

and taken under advisement by the board of appraisers.

February 7, 1906, the appraisers held a meeting in

Cincinnati, Ohio, of which notice had been given to the

Water Company but no notice of which was given to the

City of Omaha. At the time of the said meeting and pur-

suant to a written request, signed by one member of the

board of appraisers, the Omaha Water Company shipped

from the City of Omaha to Cincinnati, its books of ac-

count covering its business from 1896 to 1905, being some

thirty volumes and weighing several hundred pounds.

At said time, Mr. Fairfield, the manager, and Mr.

Stockton Heth, the treasurer of the Omaha Water Com-

pany, also went to Cincinnati, and the said Fairfield, as

maneger of the Omaha Water Company, then and there

personally appeared before the board of appraisers and

presented the said books for the private and personal

examination of the board of appraisers, but with the un-

derstanding between the Water Company and the board

of appraisers that the City of Omaha should not have an

opportunity to see or examine said books or to be in-

formed of their contents.

The attorney for the City of Omaha incidentally

learned of the shipment of the said books of the Omaha

ater Company to Cincinnati for the purpose of said

secret ex parte examination, and thereupon the said at-

orney for the City of Omaha wrote and transmitted to

he chairman of the board of appraisers a protest against

his secret and ex parte examination of the books.

5

When the manager of the Omaha Water Company

appeared before the board of appraisers with the said

books, the said letter from the City Attorney was pre-

sented to him for his perusal and asked what he had to

say in reply to it- Thereupon the manager of the Water

Company insisted that the board of appraisers had a

right to examine the said books to obtain therefrom such

information as the books contained, to be used in fixing

the value of the water works, and protested against any

examination of the said books by the City of Omaha, and

insisted that the said examination should be private and

ex parte, and that it was none of the business of the City

of Omaha what use or examination the board of ap-

praisers made of the said books. Thereupon the board of

appraisers accepted the said books, proceeded to make an

examination thereof, and subsequently transmitted the

said books to the City of Chicago and employed an audit

company to make a report therefrom to the board of ap-

praisers.

At the instance of the chairman of the board of ap-

praisers, Stockton Heth, the treasurer of the Water Com-

pany, went from Cincinnati to Chicago to give such as-

sistance to the audit company as it desired in preparing

its said report, and while in Chicago had several inter-

views touching the subject matter with the chairman of

the board of appraisers.

A report was made to the board of appraisers by the

audit company, but which report was not submitted to

the inspection of, nor its contents disclosed to the City

of Omaha. All these matters and things were conducted

with the understanding between the Water Company and

the board of appraisers that the City of Omaha should

not be permitted to kuuw any of the matters or things ap-

pearing in the said books or in the said report.

6

_ Your petitioner further represents that two of the

members of said board of appraisers lived in the City of

Chicago and the other lived in the City of Milwaukee,

and no reason was assigned for holding this ex parte

meeting in the city of Cinéinnati, February 7, 1906, at a

date more than one year after the public taking of testi-

mony had been elosed, arguments made and case sub-

mitted. In truth and in fact the board of appraisers could

have met in the City of Omaha and then and there have

examined the books of the Water Company in said city

as well as to have had this secret meeting in Cincinnati,

so far as your petitioner is informed and believes, unless

it be that it was desired to have the examination of the

books in the City of Cincinnati to avoid the discovery

thereof or any interference therewith by the City of

Omaha.

Your petitioner further avers that by reason of the

premises above stated, the Omaha Water Company and

the board of appraisers were guilty of such misconduct

as renders the award void and deprives the City of Omaha

of a ‘‘square deal’’ in the premises.

Your petitioner further avers that on the 7th day.of

July, 1906, two of said appraisers signed an award fixing

the valuation of the property of the Omaha Water Com-

pany at the sum of $6,263,295.49, and the third appraiser

refused to concur in said award but added thereto, over

his signature, the words, ‘‘I do not concur in the above

report, nor in the values as fixed therein.’’ That up to

the time of the final signing of the said award, all the

parties in interest, including the board of appraisers, un-

derstood and acted on the theory that the clause in the

contract under which the election to purchase was made

required the valuation of the water works to be deter-

mined by the joint concurrence of all three appraisers. It

7

was only when it was ascertained at the last moment that

the three appraisers could not agree that two of the ap-

praisers handed down the award in controversy.

Your petitioner further avers that the award is void

and should not be enforced for the reason that it includes

not only the water works used for supplying the City of

Omaha with water, but includes such parts of the water

works system as have been extended into and used solely

and only for the purpose of supplying the municipalities

of South Omaha, East Omaha, Dundee and Florence with

water for fire protection, public and domestic uses.

Your petitioner further avers that when in 1880 the

said contract was entered into with the City of Omaha,

the outlying municipalities of East Omaha, South Omaha

and Dundee were not in existence and were not within

the contemplation of the parties to the contract, and that

the election to purchase made by the City of Omaha under

its option, was limited to the water works which the city

had contracted for the construction of and which was

used for the supplying of the City of Omaha with water

for fire protection, public and domestic use and did not

include outlying properties.

Your petitioner further avers that the City of Omaha

did not, and does not have municipal authority to pur-

chase the water works in the said outlying municipalities

and is without power to appropriate money, to levy a tax,

or to vote bonds to pay the purchase price therefor.

Your petitioner further avers that the facts stated

in the foregoing paragraphs of this petition appear in the

printed record in this case, and each and singular of the

same were submitted to the Cireuit Court and to the

United States Circuit Court of Appeals for their consid-

eration on the respective hearings.

Your petitioner believes that the judgment and de-

8

eree of the United States Circuit Court of Appeals for

the Eighth Circuit is erroneous in the following particu-

lars:

1. That the Court erred in holding that the terms

of the contract reserving to the City of Omaha the elec-

tion to purchase the water works authorized a valuation

of the water works by a majority of the three appraisers,

whereas the Court should have held that by the terms of

the contract the valuation of the water works could only

be ascertained by the concurrence of the three appraisers.

2. The Court erred in holding that the valuation of

the water works, under the election clause in the contract,

was in the nature of a public appraisement in which the

appraisers were acting for the public as distinct from an

appraisement under a contract between individuals or

private corporations, whereas the Court should have held

that the said contract between the City of Omaha and the

Water Company as between the contracting parties, was

governed by the same rules, principles and obligations

that govern contracts between individuals or private cor-

porations, as the same Court had previously held in the

suit of the Omaha Water Company v. The City of Omaha,

147 Fed., 1.

3. That the Court erred in holding that the secret

and ex parte receiving in evidence and examination of the

books of the Omaha Water Company at Cincinnati, Feb-

ruary 7, 1906, was not an improper procedure and was

justified by precedent, whereas the said Court should have

held that the same was misconduct on the part of the

Omaha Water Company and on the part of the board of

appraisers, and that said misconduct rendered the award

void.

4. The Court erred in holding that the election to

purchase by the City of Omaha included all the proper-

9

ties of the Omaha Water Works system, including the

parts lying in the said outlying municipalities, and used

only for the supplying of the said outlying municipalities

with water, whereas the Court shuld have held that the

said election to purchase, by its terms, was limited and

confined to that part of the water works constructed un-

der the contract with the City of Omaha, and used only

for the purpose of supplying the City of Omaha with

water for fire protection, public and domestic uses, and

was so limited by Section 14 of the contract between the

City of Omaha and the Watef Company, said Section be-

ing the only authority undef which the election to pur-

chase existed.

5. That said Court effed in holding that the City

of Omaha had corporate authority to purchase that part

of the water works system extended into and used only

for supplying the municipalities of East Omaha, South

Omaha and Dundee with Water, whereas the Court should

have held that the City of Omaha was possessed of munic-

ipal authority to purchaiie only that part of the water

works used for the supplying of the City of Omaha with

water for fire protection, And public and domestic use, and

such as was necessarily appurtenant thereto.

6. That the Court erred in reversing the decree of

the Circuit Court and @ffirming the award and should

have entered its order confirming the decree of the Cir-

cuit Court dismissing the bill of complaint.

7. That the Cott erred in directing the Circuit

Court to enter a deerée finding that the award was in all

things valid, and that the City of Omaha was required to

accept the deed tendered by the Omaha Water Com-

pany and to pay for the said property the sum of $6,263,-

295.49.

Your petitioner believes that this Honorable Court

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should require the United States Circuit Court of Ap-

peals for the Eighth Circuit to certify the said cause to

it for its review and determination in conformity with

the act of Congress in such cases made and provided:

WHEREFORE, your petitioner respectfully prays

that a writ of certiorari may be issued out of and under

the seal of this court directed to the United States Circuit

Court of Appeals for the Eighth Circuit, commanding the

said Court to certify and send to this Court on a day cer-

tain to be therein designated, a full and complete tran-

script of the record of proceedings of the said United

States Circuit Court of Appeals for the Eighth Circuit in

the said case therein entitled ‘‘Omaha Water Company,

Appellant, v. The City of Omaha, Appellee, No. 2683,’’ to

the end that the said case may be reviewed and deter-

mined by this Court, as provided in the Act of Congress

entitled ‘‘An Act to Establish Cireuit Courts of Appeals,

and to Define and Regulate in Certain Cases the Jurisdic-

tion of the Courts of the United States, and for Other

Purposes,’’ approved March 3, 1891, or that your peti-

tioner may have such other or further relief or remedy

in the premises as to this Court may seem appropriate

and in conformity with the said Act, and that the judg-

ment of the said United States Circuit Court of Appeals

for the Eighth Circuit in the said case and every part

thereof may be reversed by this Honorable Court.

Your petitioner further represents that it has filed

in the Clerk’s office of this Court a certified copy of the

transcript of the record including all proceedings in the

United States Cirenit Court of Appeals, Eighth Circuit,

and has filed herewith its brief in support of this petition,

its motion, and notice to the adverse party, as required

by the rules of procedure.

Joun LEE WEBSTER,

Cart C. Wricut,

Harry E. Burnam,

Attorneys for Petitioner.

11

STATE OF NEBRASKA, |

COUNTY OF DOUGLAS. {

John Lee Webster, being duly sworn, says that he is

one of the counsel for The City of Omaha, petitioner, that

he knows the contents of the foregoing petition and that

the allegations thereof are trye as he verily believes,

SS.

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Subscribed and sw to before me by John Lee

—_—

’

Webster, this the ..:..day of...¢7.‘ x 1908.

W/ Ps 26. o¥

My commission expires’ “ie - f Beh Ua Lf a8

otary Public.

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Supreme Court of the United States.

THE CITY OF OMAHA,

Petitioner,

vs. \

OMAHA WATER COMPANY,

Respondent.

This action is a suit in equity brought by the Omaha

Water Company v. The City of Omaha to compel the city

to purchase the entire system of water works of thé

Omaha Water Company in Omaha, South Omaha, East

Omaha, Dundee and Florence for the sui of $6,263,295.49

under a contract which the Circuit Court of Appeals has

adjudged to be a public, as distinct from a private con- —

tract. :

It is a matter of great public interest to the 175,000

people living in said cities and towns, and a matter which ©

to many of them is of grave and serious concern for rea-

sons to be stated.

2

It is a case which presents questions of law about

which there is a serious conflict in the decisions between

courts of different states, between the state and the fed-

eral courts, and between the different federal courts, as

will be seen as we proceed. In one turning point in the

case, the Circuit Court of Appeals between the same liti-

gants, has handed down two opinions inconsistent with

each other, one holding the contract between the city and

the Water Company is a public contract, and the other

holding the same contract is a private contract, and on

these conflicting constructions rendered judgments

against the city in each case.

A CONDENSED STATEMENT OF FACTS.

In 1880 the City of Omaha passed ordinances author-

izing a contract for the construction of water works for

supplying the City of Omaha with water for fire protec-

tion, and public and domestic use. The ordinance which

became a part of the contract contained a clause as fol-

lows, (rec. pp. 784-790) :

‘*Section 14——The City of Omaha shall have the

right at any time after the expiration of twenty

years to purchase the said water works at an

appraised valuation, which shall be ascertained

by the estimate of three engineers, one to be se-

lected by the City Council, one by the Water

Works Company, and these two to select the

third, provided that nothing shall be paid for the

unexpired franchise of said Company.’’

Pursuant to said Section the Mayor and Council of

the City of Omaha by an ordinance, approved March 2,

1903, elected to purchase the water works ‘‘as authorized

and provided by Section 14 of Ordinance No. 423,’’ (rec.

p. 179). The City of Omaha appointed an appraiser, the

Water Company appointed an appraiser, and the two se-

lected a third appraiser. The three appraisers met in the

3

City of Omaha July 20, 1903, (ree. p. 180), and began tak-

ing testimony in open session, (rec. pp. 149-150). The

respective parties appeared by their attorneys, produced

and examined witnesses and offered much evidence of a

documentary character, (rec. p. 150). This manner of

procedure the board continued from time to time until

December 31, 1904, when the matters were argued orally

and by printed briefs before the board of appraisers by

the attorneys for the respective parties. At this date the

board adjourned and took the valuation under advise-

ment, (ree. pp. 151-152).

Subsequently in February, 1906, the Water Company

secretly and without the knowledge of the City of Omaha,

(then and there well knowing that the City of Omaha

would protest against the secret and clandestine presen-

tation of ex parte evidence), shipped its books of account,

covering a period of ten years of its business, from

Omaha to Cincinnati, Ohio, and there presented the same

to the board of appraisers for their inspection and con-

sideration, coupled with an understanding between the

Water Company and the appraisers that the appraisers

would secretly receive the said evidence and would re-

fuse to disclose to the City of Omaha the nature, force or

effect of the said evidence.

The city was never permitted to see the said books,

although it demanded an opportunity to do so, and the

city has never been advised of the contents thereof,

nor to what extent the appraisers were influenced by the

said books in fixing the value of the water works. It is

manifest that the said books were the only source of in-

formation the appraisers had in finding the ‘‘going

value’’ of the water works and may have had much weight

in determining the cost of the construction of the works,

as well as.the purchase price of water pipes and pumping

engines.

4

On the 7th day of July, 1906, the award was made

fixing the value of the water works at $6,263,295.49, which

was signed by two of the appraisers, to-wit: Daniel W.

Mead and G. H. Benzenberg, and which award was not

concurred in by John W. Alvord, one of the appraisers,

but who affixed to said report above his own signature, the

- words, ‘‘I do not concur in above report, nor in the values

as fixed therein.”’

The Omaha Water Company has extended its sys-

tem of water works from the town of Florence on the

north to the City of South Omaha on the south, and from

East Omaha on the east to the town of Dundee on the

west, and is engaged in supplying the City of Omaha and

the other four named municipalities with water.

The appraisers included in their valuation the entire

water works system. The City of Omaha contends that

it is without corporate power to buy, or to levy a tax, or to

issue bonds to pay for the outlying property. The Circuit

Court held the award void and dismissed the Bill. The

Cireuit Court of Appeals held the award valid and di-

rected the entry of a decree to that effect. The three pri-

mary legal questions for consideration, are:

(1) The award is void because not concurred in by

the three appraisers.

(2.) The award is void on account of the miscon-

duct of the appraisers and of the Water Company, aris-

ing out of the secret ex parte examination of the books of

the Water Company by the appraisers in the City of Cin-

cinnati more than a year after the public taking of testi-

mony had been closed and case submitted.

(3) The award is void in that it includes property

in outlying municipalities which the City of Omaha did

not elect to buy, and which it is without corporate power

to buy or to pay for.

BRIEF OF THE ARGUMENT.

L

THE AWARD 16 YOID BECAUSE NOT CONCURRED IN BY THE ~

THREE APPRAISERS. THE ELECTION TO PURCHASE

UNDER SECTION 14 OF ORDINANCE 4283 CONTEMPLATED

THE VALUATION TO BE ASCERTAINED BY THREE AP-

PRAISERS, NOT BY TWO APPRAISERS.

The contract in the case at bar, by its language and

by the interpretation put upon it by everybody connected

with this transaction, contemplated that the valuation.

should be ascertained by the joint concurrence of the

three appraisers, and all parties acted on that theory

until the moment when it was finally determined that the

three appraisers could not agree, whereupon for the first

time, two appraisers assumed to make an award.

The law of the case is universal in both England and

America that a contract worded as in the case at bar, re-

quires the joint concurrence of all the appreivers and

that an award by two is void.

The Court of Appeals disposed of this point in the

case by holding that this appraisement was a matter of

public concern as distinct from an appraisement under a

contract, and cited in support of its conclusion the fol-

lowing cases: Colombia v. Cauca Co., 190 U. S., 524;

Grindley v. Barker, 1 Bos. & P., 229; King v. Beetson, 3

Term., 592; Withnell v. Gartham, 6 Term., 388; Gas Co. v.

Wheeling, 8 W. Va., 320; Green v. Miller, 6 Johns, 39; Ex

Parte Rogers, 7 Cow., 526; Downing v. Rugar, 21 Wend.,

178; Crocker v. Crane, 21 Wend., 211; People v. Nichols,

52 N. Y., 478; The People v. Walker, 23 Barb., 304; Young

v. Buckingham, 5 Ohio, 485; Patterson v. Leavitt, 4

Conn., 50; Eames v. Eames, 41 N. H., 177, 181.

No one of said cases meets the question in hand.

6

This court, in the Colombia case, puts stress upon

the following points:

(a) That Colombia had taken over the railroad and

had not offered to rescind, and was therefore not in a

position to dispute the award.

(b). That the arbitration was between a sovereign

state and a railroad company, declared by a law of Co-

lombia to be a work of public utility.

(c) The Commission ‘‘had itself resolved, under

the powers given to it in the agreement that a majority

vote should govern’’ and had so acted during the whole

course of its labors. The said case is, therefore, distinct

from a case where the appraisers were appointed by the

parties to a contract under a contractual agreement to

deal with matters of business concern. The Colombia

ease falls within the exception to the general rule upon

the proposition that it was one of international and pub-

lic concern, in which not only the national government of

the Republic of Colombia was interested, but in which the

United States became interested and the Secretary of

State appointed one of the appraisers.

The Wheeling Gas case is not in point for the reason

that the act of the legislature of Virginia, which created

the company, provided in the said act for the appointment

of the appraisers in the event of the election to purchase.

In that case it was not, therefore, a matter of contract be-

tween the city and the gas company, but was a matter

arising only under a public law.

In any event, in the Wheeling case all that was said

on the point was but an expression of the views of the

writer of the opinion, but left the question open to future

discussion, and was not the point on which the case was

decided. This will be seen by what the writer of the opin-

ion said in conclusion upon the subject; ‘‘ But on account

7

of the seeming confusion of the authorities on the sub-

ject, and as I do not deem it material under the view I

take of the award in other respects to finally determine it

now, the right to reconsider and re-examine the question

in a proper future case is reserved and left open.’’

Grindley v. Barker, 1 Bos. P., 229, was not a case of

appraisers under a contract, but of ‘‘searchers’’ ap-

pointed under a public law to perform a public duty, to-

wit: under an act of Parliament concerning tanners. They

were public officers acting in the performance of a public

duty and in no sense of the word were they appraisers or

arbitrators.

King v. Beetson, 3 Term., 592, is a case of church

wardens acting under an act of Parliament. In that case,

Kenyon, chief justice, held that the statute under which

they acted provided that a majority might act.

Withnell v. Gartham, 6 Term 388, is not a case of ap-

praisement but of an appointment of a school master by

the vicar and a majority of the church wardens.

Green v. Miller, 6 Johns., 39, is a ease where the court

held the award void because signed by four, the fifth not

signing. The point ruled by the Circuit Court of Appeals

is not in the case.

Ex. Parte Rogers, 7 Cow., 526, is a case of damages

assessed by canal commissioners, appointed under an act

of the legislature of 1825. The comimssioners are deserib-

ed by the court as a tribunal appointed by law to act in a

matter of public concern. Confessedly they were acting

as public officers in an official capacity. In that case the

court said that in arbitration proceedings ‘‘the whole

body must be unanimous.’’

Downing v. Bugar, 21 Wend., 178, the court stated

the rule in the following language, p. 182:

‘‘The rule seems to be well established, that in the

/

exercise of a public as well as private authority,

whether it be ministerial or judicial, all the per-

sons to whom it is committed must confer and act

together, unless there be a provision that a less

number may proceed. Where the authority is

public, and the number is such as to admit of a

majority, that will bind the minority, after all

have duly met and confe “sa

The above quotation recognizes our point of conten-

tion, to-wit: that to justify an award by a majority the

authority must come from the public. In all other cases,

including those where the appraisers appointed by the

parties under contract, even though acting in a public

matter, all must join in the award.

Crocker v. Crane, 21 Wend., 211, is a case of commis-

sioners appointed under an act of legislature incorporat-

ing a railroad company to receive subscriptions to the

capital stock, not a case of appraisers appointed by the

parties under a contract.

People v. Nichols, 52 N. Y., 478, is a case where three

persons were named by an act of legislature of New York

to appraise certain relics of George Washington. The

Court held that a certificate by two was sufficient because

they were public officers, acting under a public law, but

in that case Grover, J., delivered a dissenting opinion.

The People v. Walker, 23 Barb., 304, is a case of jury

commissioners provided for under a statute of the state,

not a case of appraisers appointed under contract, and in

that case it was said that when a private authority is

conferred on several all must be present and all must con-

eur, unless provision be otherwise made.

Young v. Buckingham, 5 Ohio, 485, is a case of com-

missioners appointed by the court under a law of the state

to condemn land for a public canal. It was held in that

case that a majority of the commissioners might make an

9

award but because they were acting as public officers in a

judicial capacity.

Patterson v. Leavitt, 4 Conn., 50, is a case where the

court held the award void because agreed to by two, and

where the third, as in the case at bar, entered his dissent

in writing on the back of the submission.

Eames v. Eames, 41 N. H., 177, is a case where the

court held the arbitration void because not concurred in

by the three arbitrators.

It will be seen from this brief analysis of the cases

cited by the Court of Appeals in its opinion, that the only

cases wherein the courts ruled a majority might make

the award, are cases where the appraisers were appointed

and acting under a public law as quasi public officers, or

appointed by governments in matters of international

dispute. No one of the said cases applied the rule to ar-

bitrators or valuers of property whose appointment is

provided for under a contract and who are acting under

such contfact, as in the case at bar.

In the case at bar the appraisers were not appointed

under ordinance 428. Said ordinance was an invitation

for bids for the construction of water works to conform

to the ¢onditions and requirements of the ordinance. Bids

were feceived and a formal written contract was entered

into which by its terms made ordinance 423 a part of the

contract. It was under this contract the water works were

consttucted and under this contract the option to purchase

is reserved. Without this contract the water works would

not have been constructed and no option to purchase exist.

It is distinct in every sense of the word from the West

Virginia and New York cases in that it arises under a con-

tract.

Every argument stated by the Court of Appeals in

its opinion to justify the award by two appraisers in the —

case at bar would apply with equal force to every ap-

10

praisement, or arbitration, or award made under a con-

tract between individuals or corporations, yet the rule of

law is universal in such cases that the award must be con-

curred in by all unless it is otherwise provided.

The statement by the court that it was not intended

that the appraiser selected by the city or the one selected

by the company might cause the appraisal to miscarry by

refusal to join in the valuation found by the other two,

is not justified by any language in the contract. On the

other hand, we might suggest that the purpose and inten-

tion of the-contract was that all three should concur in

the award so as to insure a fair valuation and to prevent

the Water Company securing an excessive and unreason-

able valuation through the voice of a majority of the ap-

praisers.

Language will be found in many of the authorities

hereafter cited to the effect that the method in this case

provided, to-wit: that each of the parties shall select one

appraiser and these two the third, is to secure three

things : |

(1) Unanimity in valuation.

(2) A fair valuation.

(3) That neither party shall obtain an undue ad-

vantage by the influence it may have or exercise over a

mere majority.

The cases cited in the opinion of the Court of Appeals

are exceptional cases to the general rule.. The rule is,

under provisions like that in the case at bar, that all three

of the appraisers must concur in the award, otherwise

it is void.

The contract was not that the city would purchase

upon the valuation to be agreed on by a majority, nor by

two of the appraisers. Neither is it a case where upon

disagreement of the two that a third was to be selected,

nor where a third was to be selected to act as umpire.

11

The conclusions from the terms of the contract of

submission. and cases supporting same are:

(a) ‘lhe submission contemplated an appraisement

and award by the three persons named.

(b) The fact that the third man was selected by the

other two does not create an implication that two might

make an award.

Willis v. Higginbotham, 61 Miss., 164.

Harris v. Denton, 39 So., 456.

Weaver v. Powel, et al., 23 Atl., 1070.

Lowe v. Brown, 22 Ohio St., 463.

Stose v. Heissler, 120 Ill., 433.

(c) The contract of submission contains no provis-

ion in direct terms or by implication for a majority award,

therefore a majority award is void.

Memphis ¢ Charleston R. Co. v. Pillow, 56 Tenn.,

248.

Weaver v. Powel, et al., 23 Atl., 1070.

Lowe v. Brown, 22 Ohio St., 463.

(d) The rule of construction is that the contract of

submission will be construed as requiring the award to

be concurred in by all the appraisers or arbitrators, un-

less by express words or necessary implication it author-

izes an award by less than all.

Richards v. Holt, et al., 61 Iowa, 529 (16 N. W.,

595).

Hubbard v. Great Falls Manf. Co., 12 Atl., 878,

(80 Me., 39).

Lowe v. Brown, 22 Ohio St., 463.

Godfrey v. Knodle, 44 Tll., App., 638.

Oakley v. Anderson, 93 N. C., 108.

Mackey v. Neill, 53 N. C., 214.

Anderson v. Farnham, 34 Me., 161.

Owens v. Withee, 3 Texas, 161.

12

(e) -This is a common-law award, and the submis-

sion, Section 14 of Ordinance 423, does not contain a pro-

vision that two of the appraisers may make an award

without the concurrence of the third.

The rule is general and imperative that all rust con-

cur in the award to render it valid, unless a contrary in-

tention is clearly and unmistakably to be gathered from

the terms of the submission.

Morse on Arbitration and Award, p. 162.

Willis v. Higginbotham, 61 Miss., 164.

Weaver v. Powel, et al., 23 Atl., 1070.

Eames v. Eames, 41 Conn., 177.

Towne v. Jaquith, 6 Mass., 46.

Nettleton v. Gridley, 21 Conn., 531.

(f) All must concur in the award to make it valid

unless the parties have agreed that it may be made by less

than all.

Leavitt vs. Windsor Etc., 54 Fed., 439.

Jeffersonville R. R. v. Mounts, 7 Ind., 669.

Willis v. Higginbotham, 61 Miss., 164.

Weaver v. Powel, et al, 23 Atl., 1070.

Green v. Miller, 6 Johns., 39.

Patterson v. Leavitt, 4 Conn., 50.

Towne v. Jaquith, 6 Mass., 46.

Byrd v. Harkrider, 108 Ind., 376.

Harryman v. Harryman, 43 Md., 140.

(g) Where the award is only signed by two and not

concurred in by the third, unless there be an agreement

by the parties that two may make the award the award

will be void.

Morse on Arbitration, p. 162.

Jeffersonville R. R. Co. v. Mounts, 7 Ind., 669.

Willis v. Higginbotham, 61 Miss., 164.

Green v. Miller, 6 Johns., 39.

13

Patterson v. Leavitt, 4 Conn., 50.

Towne v. Jaquith, 6 Mass., 46.

Nettleton v. Gridley, 21 Conn., 531.

Byrd v. Harkrider, 108 Ind., 376.

Smith v. Waldon, 26 Ga., 249.

(h) The fact that each party selected an appraiser,

and these two the third, does not give two the right to

make an award, and an award so made is void.

Jeffersonville R. R. Co. v. Mounts, 7 Ind., 669.

Willis v. Higginbotham, 61 Miss., 164.

Patterson v. Leavitt, 4 Conn., 50.

United Kingdom, Etc. v. Houston, 1 Q. B. L.R., 567.

Conflicting decisions in the Circuit Court of Appeals.

The Circuit Court of Appeals in the case at bar, in order

to justify its judgment, ruled in its opinion that the con-

tract between the City of Omaha and the Omaha Water

Company, under which the election to purchase was made

and the proceedings relating thereto were had, was a

matter of public concern as distinct from a business

contract. It was on this theory that the Court escaped

applying to the case at hand authorities which we have

cited supra.

Omaha Water Co. v. The City of Omaha, 147 Fed., 1,

is a case in which the same Court held that the same con-

tract between the City of Omaha and the Water Company

was a matter of private contract as distinct from one of

public concern. That case arose under the same contract

between the city and the Water Company. The City of

Omaha undertook to reduce the meter rates provided for

in the contract, claiming that the meter rates fixed in the

contract were a privilege or immunity subject to subse-

quent modification, or failing that, that the said meter

rates were a matter of public concern and of a public na-

ture, and were subject to the control and modification of

14

the city as conditions changed, and did not constitute an

irrevocable and unalterable contract. The Court of Ap-

peals in that case held that the contract in question be-

tween the city and the Water Company was a business or

proprietory contract under which the city was governed

by the same rules as individuals or private corporations

are governed.

The same Court now holds on the election to pur-

chase, that the same contract between the City of Omaha

and the Water Company is a public contract and of a pub-

lie nature as distinct from a contract between individuals

or a private corporation. Certainly the City of Omaha

in dealing with the Water Company, has the right to have

the contract receive the same interpretation in its dif-

ferent litigations with the Water Company. It cannot be

that the same contract in one law suit shall be ruled to be

a private contract for the purpose of nullifying the action

of the city government in regulating meter rates, and in

the next suit shall be held to be a public contract for the

purpose of nullifying a subsequent action by the same

city government.

Other cases in which the courts have held contracts

of this sort to be private contracts, as distinct from pub-

lie contracts, are: Illinois Trust, Etc. v. City of Arkansas

City, 76 Fed., 271; Wagner v. City of Rock Island, 146

Til., 1389; App. of Brum, 12 Atl., 855; Safety Insulated

Wire & Cable Co. v. Mayor & City Council of Baltimore,

66 Fed., 140; Cincinnati v. Cameron, 33 Ohio St., 336.

Wheeling Gas Co. v. Wheeling, 8 W. Va., 320, cited

supra, if to be construed as holding that the arbitration

is a public appraisement merely because the city is a

party, is without precedent in judicial history and con-

trary to all authority on the point until the coming down

of the opinion from the Court of Appeals in the case at

bar.

15

A public appraisement, within the meaning of the

law, is one where the appraisers or arbitrators are ap-

pointed under a state or national law and act as quasi

public officers in the performance of a public duty.

Grindley v. Barker, 1 Bos. & Pull., 229.

King v. Beeston, 3 Term., 592.

Withnell v. Gartham, 6 Tenn., 388.

Ex Parte Rogers, 7 Cow., 525.

Sinclair v. Jackson, 8 Cow., 543.

Young v. Buckingham, 5 Ohio, 485.

State v. McMillan, 29 S. E., 540.

Carroll v. Alsup, 107 Tenn., 271.

Cortis v. The Kent Water Works, 7 B. & C., 314.

To make an appraisement a public one, as distinct

from a private one, the appraisers must be appointed un-

der and act under the authority of a general law, as quasi

public officers.

See cases cited supra.

Cooley v. O’Connor, 12 Wall., 391.

Carroll v. Alsup, 107 Tenn., 271.

Cortis v. The Kent Water Works, 7 Barn. & Cress.,

314.

The King v. Whitaker, 9 Barn. & Cress., 648.

People v. Walker, 23 Barb., 304.

People v. Coghill, 47 Cal., 361.

Hewitt v. Craig, 5 8. W., 280.

Where a matter is referred to arbitrators as

individuals, there joint concurrence in the award is neces-

sary, and the arbitration will be treated as a private, as

distinct from a public proceeding.

Commonwealth ex rel. Hall v. Canal Commission-

ers, 9 Watts., 466.

People v. Walker, 23 Barb., 304.

The submission in the case at bar is a private con-

16

tract appraisement. The city in making its contract with

the water company, was acting, not in its governmental

capacity, but in its business capacity.

The City of Omaha v. Omaha Water Co., 147

Fed., 1.

Illinois Trust Etc. v. City of Arkansas City, 76

Fed., 271-282.

Wagner v. City of Rock Island, 146 IIl., 139-154.

Appeal of Brum, 12 Atl., 855.

Safety Ins. W. & C. Co. v. Mayor and City Council

of Baltimore, 66 Fed., 140.

Cincinnati v. Cameron, 33 Ohio St., 336.

The city, by voluntarily entering into an arbitration

agreement in a business of this sort, does so in its private

capacity, as individuals and private corporations may do,

and is bound by the same rules of procedure.

Kane v. Fond du Lac., 40 Wis., 495.

Dick v. Dummerston, 19 Vt., 362.

Hine v. Stephens, 33 Conn., 504.

Springfield v. Walker, 42 Ohio St., 543.

1 Dill. Mun. Corp., Sec. 478.

It follows that the award is void because not con-

curred in by all three appraisers.

It is a matter of common knowledge that water com-

panies, and gas companies, and electric light companies,

and street railway companies are ‘‘public service corpor-

ations,’’ but the point remains that the contracts between

such companies and the municipalities are to be treated

as and are governed by the rules which control private

contracts, and that the cities entering into contracts with

these public service corporations are acting in their busi-

ness or proprietary capacity.

No cases are cited in the opinion of the Cireuit Court

of Appeals to the point that a public service corporation

17

is exempt from the rules governing common law arbitra-

tion or that in such cases the majority may make an

award unless it is so stipulated in the terms of submis-

sion, with the possible exception of the Wheeling case

which we have already commented upon.

I.

THE AWARD IS VOID BECAUSE THE APPRAISERS CONCLUDED

THE FORMAL HEARING OF TESTIMONY AND THE ARGU-

MENTS OF ATTORNEYS FOR THE RESPECTIVE PARTIES ON

THE 81ST DAY OF DECEMBER, 1904, AND AFTERWARDS IN

FEBRUARY, 1906, IN THE CITY OF CINCINNATI, PRI.

VATELY AND AGAINST THE PROTEST OF THE CITY OF

OMAHA, RECEIVED AND SECRETLY EXAMINED EX PARTE,

THE BOOKS OF THE WATER COMPANY, AND UNDER AN

UNDERSTANDING THAT THE CITY OF OMAHA SHOULD NOT

BE PERMITTED TO SEE OR KNOW THE CONTENTS OF

SAID BOOKS.

The question to be considered involves a moral prin-

ciple. The incident complained of did not give the city a

““square deal.’’

The facts of this incident are as follows:

Between the date of the organizing of the Board,

July 20, 1903, and the 31st day of December, 1904, some

two thousand pages of typewritten evidence was formally

introduced by the respective parties, and hundreds of

plans and blue prints, and several hundred pages of in-

ventory were presented, (rec. pp. 149, 150, 151 and p. 181).

The attorneys for the respective parties made their for-

mal arguments and filed printed briefs on the 31st day of

December, 1904, (rec. p. 151), and the City of Omaha then

understood that the taking of testimony was concluded

and the matter taken under advisement.

Subsequently a meeting of the Board was called to

18

be held at Cincinnati, Ohio, February 7, 1906, although

two of the appraisers, Mead and Alvord, lived in Chicago,

and Benzenberg lived in Milwaukee. No notice of this

meeting was given to the city, but notice was given to

the Water Company by means of a letter written by the

chairman of the Board to the manager of the Water Com-

pany, (rec. p. 176). During the time when the formal

testimony was being taken in the City of Omaha, the

Water Company had expressed a willingness that the ap-

praisers might examine the books, conditioned that the

city should not be permitted to be present or to see the

books examined, (rec. p. 105).

Notwithstanding the protest of the city made at that

time, the manager of the Water Company, in compliance

with the letter of the chairman of the Board, shipped to

Cincinnati the books of the Company for the years 1896

to 1905, comprising thirty large volumes, weighing sev-

eral hundred pounds, (rec. pp. 106-107).

The attorney for the city, incidentally becoming ad-

vised that the books had been shipped to Cincinnati, sent

to the Board a formal protest against the ex parte exam-

ination of the books, (rec. pp. 161-162). When the man-

ager of the Water Company appeared before the Board

of Appraisers in Cincinnati with his books, he was pre-

sented with this letter of protest from the attorney for

the city, (rec. p. 108,) and in reply thereto the manager

of the Water Company stated to the Board of Appraisers

that he did not see why the Board should care whether

the city or any one else, protested against the examina-

tion of the books, and he refused to give his consent to the

city being present, for the reason that the information

contained in the books was ‘‘confidential information,’’

and further, that the books were presented for the pur-

pose of assisting the Board in arriving at a valuation of

the water works, (rec. p. 121).

19

The books were then examined by the Board of Ap-

praisers with the understanding that the Board of Ap-

praisers would keep secret the information derived from _

the books, and subsequently the books were shipped to

Chicago and placed in the hands of an audit company to

prepare therefrom a statement for the use of the Board -

of Appraisers, (ree. pp. 109-110), and that the treasurer -

of the Water Company went to Chicago and there re-

mained several days to give such assistance as the audit

company might desire, (rec. pp. 113-114).

The information of this startling misconduct on the

part of the Water Company and of the Board of Ap-

praisers, came through the examination of the manager

and treasurer of the Water Company. No apology or

explanation was ever given for it. It stands in the record

as a bold and successful introduction ex parte of secret

evidence intended to influence the appraisers in fixing

the value, and the Board of Appraisers knowingly and

wilfully were parties to this misconduct, because they did

it after having read the letter of protest from the at-

torney for the city and after a consultation with the man-

ager of the Water Company as to the propriety of do-

ing it.

The Cireuit Court of Appeals endeavors to dispose

of this objection to the award by conceding that if the ap-

praisers were acting as arbitrators that it would vitiate

the award, but whereas they were acting as appraisers

or valuers of property, there was no impropriety in this

misconduct. That reasoning is begging the question.

Whether a board of appraisers, valuers of property or

arbitrators, the rule is the same, to-wit: that they have no

right to enter into any arrangement or come to any un-

derstanding with one party in interest that he may fur-

nish secret evidence for the purpose of influencing their

20.

judgment or affecting the value of the property, coupled

with the further understanding that this secret evidence

shall be clandestinely presented and that the adverse

party shall not be permitted to know what it is. In this

case the Board of Appraisers practically agreed with the

manager of the Water Company that they would not dis-

close to the city the fact that they had examined the books

or the contents thereof, and would thereby not give the

city any opportunity to know whether the books were cor-

rect or false or to offer any counter evidence.

No court would permit an appraisement of real estate

under an execution to stand, where the appraisers were

guiltu of such misconduct.

The present case is more aggravated because this

Board of Appraisers, from July 20, 1903, to December

31, 1904, one year and a half, had openly and publicly

permitted the parties to present and examine witnesses

in open session, thereby giving all parties in interest to

understand up to that date, that the receiving and exam-

ination of evidence was to be open and above board in the

presence of the parties after giving due notice. To re-

sort to the secret method of receiving evidence more than

a year later, to-wit: February 7, 1906, was such a depar-

ture from what had gone on before as to carry on the face

of it the imprint of unfairness. To our minds it was such

inexcusable misconduct as vitiates the award. So far as

the writer of this brief is aware, no reported case can be

found in any country where the English language is

spoken that justifies such conduct or sustains an award

under such circumstances, prior to the handing down of

the present opinion.

(a) The conclusions warranted by the reported

cases are that the ex parte examination by the Board of

Appraisers of the books of the Water Company at Cin-

21

cinnati and against the protest of the City of Omaha, and

without giving the City of Omaha an opportunity to ex-

amine said books or to be heard, was such misconduct as

makes the award void.

Emery v. Owings, 7 Gill., 448.

Bassett v. Harkness, 9 N. H., 164.

Jenkins v. Liston, 13 Grat., 535.

Rand v. Peel, 74 Miss., 305.

Natl. Bank of Republic v. Darragh, 30 Hun., 29.

Warren v. Tinsley, 53 Fed., 689.

Cameron v. Castleberry, 29 Ga., 495.

Walker v. Frobisher, 6 Ves., 69.

Strong vs. Strong, 9 Cush., 560.

Hewitt v. Village of Reed City, 124 Mich., 6.

Vessel Owners’ Towing Co. v. Taylor, 126 Tll., 250.

Elmendorf v. Harris, 23 Wend., 638.

Dobson v. Groves, 6 Q. B., 637.

Western Female Seminary v. Blair, 1 Dis., 370.

In re Plews and Middleton, 6 Q. B., 845.

In re Tidswell, 83 Beav., 213.

Passmore v. Petitt, 4 Dall., 270.

Wood v. Helme, 14 RB. I., 325.

Jackson v. Roane, 90 Ga., 669.

Wilkins v. Van Winkle, 78 Ga., 557.

Rosenau v. Legg, 82 Ala., 568.

Knowlton v. Mickles, 29 Barb., 465.

Sisk v. Gary, 27 Md., 401.

Cleland v. Hedley, 5 R. 1., 163.

(b) The receiving of ex parte evidence—the books

of the water company—after the public taking of evi-

dence had been closed and arguments of attorneys made,

aggravates the misconduct and the award is void.

Walker v. Frobisher, 6 Ves., 69.

Jackson v. Roane, 90 Ga., 669.

22

Catlett v. Dougherty, 114 I1., 568.

Wilkins v. Van Winkle, 78 Ga., 557.

Hewitt v. Village of Reed City, 124 Mich., 6.

Rosenau v. Legg, 82 Ala., 568.

Dobson v. Groves, 6 Q. B., 637.

Knowlton v. Mickles, 29 Barb., 465.

Western Female Seminary v. Blair, 1 Dis., 376.

Sisk v. Gary, 27 Md., 401.

Cleland v. Hedley, 5 R. 1., 163.

Bassett v. Harkness, 9 N. H., 164.

Rand v. Peel, 74 Miss., 305.

(ec) The ex parte examination by arbitrators of

book accounts renders the award void.

Emery v. Owings, 7 Gill., 448.

In re Tidswell, 33 Beav., 213.

Same as to newspapers containing quotations of

market prices:

Wilkins v. Van Winkle, 78 Ga., 557.

Jgckson v. Roane, 90 Ga., 669.

Cleland v. Hedley, 5 R. L., 163.

(d) The ex parte examination by arbitrators of a

written paper or statement renders an award void.

Jenkins v. Liston, 13 Grat., 535.

Natl. Bank of Republic v. Darragh, 30 Hun., 29.

Hewitt v. Village of Reed City, 124 Mich., 6.

Dobson v. Groves, 6 Q. B., 637.

Passamore v. Petit, 4 Dall., 270.

Wilkins v. Van Winkle, 78 Ga., 557.

(e) The ex parte examination of a witness, or the

receiving of a statement from a witness ex parte renders

the award void.

Walker vs. Frobisher, 6 Ves., 69.

Vessel Owners’ Towing Co. vs. Taylor, 126 TIl., 250.

Elmendorf v. Harris, 23 Wend., 628.

23

Dobson v. Groves, 6 Q. B., 637.

Western Female Seminary v. Blair, 1 Dis., 370.

In re Plews and Middleton, 6 Q. B., 845.

Wood v. Helme, 14 R. I., 325.

Jackson v. Roane, 90 Ga., 669.

Rosenau v: Legg, 82 Ala., 568.

Knowlton v. Mickles, 29 Barb., 465.

Sisk v. Gary, 27 Md., 401.

Rand v. Peel, 74 Miss., 305.

(f) The law and public policy require that arbitra-

tors shall give notice to the parties of each time and place

when testimony is to be received, so that they may have ©

an opportunity to be present and heard.

Lutz v. Linthicum, 8 Peters, 165.

Emery v. Owings, 7 Gill., 448.

Warren v. Tinsley, 53 Fed., 689.

Vessel Owners’ Towing Co. v. Taylor, 126 Tll., 270. |

Elmendorf v. Harris, 23 Wend., 628.

Wood v. Helme, 14 R. T., 325.

Rosenau v. Legg, 82 Ala., 568.

Bassett v. Harkness, 9 N. H., 164.

McFarland v. Mathis, 10 Ark., 560.

(g) The fact that the ex parte evidence may be re-

garded as unimportant does not militate against the rule

that declares the award to be void.

Natl. Bank of Republic v. Darragh, 30 Hun., 29.

Dobson v. Groves, 6 Q. B., 637.

In re Plews and Middleton, 6 Q. B., 845.

In re Tidswell, 33 Beav., 213.

(h) An award made upon ex parte evidence or with-

out giving notice of time and place of hearing, is void.

Marks v. No. Pac. R. Co., 76 Fed., 941.

Slater v. La Grand Light € Power Co., 73 Pac., 738.

Falconer v. Montgomery, 4 Dall., 432.

24

Wood v. Helme, 14 R. L., 325.

Day v. Hammond, 15 Am. Rep., 522.

Ingraham v. Whitmore, 75 Il., 24.

Alexander v. Cunningham, 111 IIL, 511.

(i) The court will not permit an inquiry into the ef-

fect of the ex parte evidence, but will set aside the award.

Jenkins v. Liston, 13 Grat., 535.

Natl. Bank of Republic v. Darragh, 30 Hun., 29.

Hewitt v. Village of Reed City, 124 Mich., 6.

Cleland v. Hedley, 5 R. L., 163.

Knowlton v. Mickles, 29 Barb., 465.

(j) It is not necessary for the City of Omaha to in-

troduce evidence that the arbitrators were improperly

influenced by the ex parte evidence.

Warren v. Tinsley, 53 Fed., 689.

Elmendorf v. Harris, 23 Wend., 628.

Ingraham v. Whitmore, 75 Il., 24.

Alexander v. Cunningham, 111 IIl., 511.

Jackson v. Roane, 90 Ga., 669.

(k) The award will be held to be void, even though

it appears that the appraisers were respectable gentle-

men, or did not consider the ex parte evidence, or were

not influenced thereby.

Walker v. Frobisher, 6 Ves., 69.

Natl. Bank of Republic v. Darragh, 30 Hun., 29.

Hewitt v. Village of Reed City., 124 Mich., 6.

Dobson v. Groves, 6 Q. B., 637.

Passamore v. Petitt, 4 Dall., 270.

Knowlton v. Mickles, 29 Barb., 465.

McFarland v. Mathis, 10 Ark., 560.

(1) The water company will not be heard to say that

its conduct in presenting its books to the board of ap-

praisers did not improperly influence them or produce

harmful results.

25

Catlett v. Dougherty, 114 Ill., 568.

Ins. Co. v. Hegewald, 66 N. E., 902.

(m) An arbitrator who takes instructions from one

side—as Mead did from the manager of the water com-

pany regarding the books—is in law acting corruptly.

Strong v. Strong, 9 Cush., 560.

Western Female Seminary v. Blair, 1 Disney, 370,

(n) The city, having protested against the ex parte

examination of the books, cannot be held to have waived

the misconduct.

Dobson v. Groves, 6 Q. B., 637.

Il.

THE CITY OF OMAHA IS WITHOUT CORPORATE AUTHORITY

TO PURCHASE, OR TO LEVY TAXES, OR ISSUE BONDS TO

PAY FOR THE WATER WORKS LYING WITHIN THE COR-

PORATE LIMITS OF SOUTH OMAHA, EAST OMAHA, DUNDEE

AND FLORENCE USED FOR THE SUPPLYING OF SAID

MUNICIPALITIES WITH WATER, EXCEPT THE INTAKE,

PUMPING STATION AND SETTLING BASINS IN FLORENCE,

WHICH ARE APPURTENANT TO AND AN ESSENTIAL PART

OF THE SYSTEM FOR SUPPLYING THE CITY OF OMAHA

WITH WATER.

The election to purchase was under that clause of

the contract between the city of Omaha and the Water

Company, known as Section 14 of Ordinance 423, passed

in 1880. (p. 2, supra.) At the time when the said Ordi-

nance 423 was approved and the contract for the construec-

tion of the water works entered into, these outlying munic-

ipalities, East Omaha, South Omaha and Dundee were

not in existence, (ree. p.—), consequently it could not

have been within the contemplation of the parties at that

time that the water works were to be extended into these

26

municipalities, nor that the city of Omaha was to buy

water works in these municipalities.

The report of the engineer designing the water works,

(rec, 368-384), designed a system of water works for the

city of Omaha alone. The Ordinance providing for the

construction of the water works confined it to the city of

Omaha, (rec. p. 784), and confessedly the franchise

granted by the city of Omaha to the Water Company was

only for the operation of a plant for the supplying of the

city of Omaha with water for fire protection, and public

and domestic use. The right of the city to purchase by

election and appraisement, under Section 14 of Ordinance

423, must be confined to the water works then contracted

for and within the contemplation of the parties if the said

contract and the law then in force is to govern this case.

The Court of Appeals endeavors to escape this posi-

tion by the suggestion that subsequent acts of legisla-

ture, by implication, gave the city the power to purchase

these outlying properties, to-wit: the Compulsory Pur-

chase Act of the state of Nebraska of 1903, and the pro-

vise in Act creating the Water Board, Section 7659 and

Section 7661, Cobbey’s Ann. Statutes of 1905, that the

Water Board might ‘‘contract with any municipality ad-

jacent to such city to supply such municipality with water

for domestic, mechanical, public, or fire purposes; or

may contract, to the same end, with any person, co-part-

nership or corporation, supplying any such adjacent

municipality with water for domestic, public or fire pur-

poses, upon such terms and conditions as said Water

Board may deem proper.’’

The above quotation from the Statute of 1903 said

nothing about the purchase of water works property in

said adjacent municipalities. There is a clear distinction

between the power of the city of Omaha to buy water

27

works in adjacent municipalities and the power of the

city of Omaha to enter into a contract to deliver water to

a water works system in an adjacent municipality.

If the purchase of the water works is to be governed

by the law as it existed when the contract of 1880 was

entered into, then the court cannot resort to the Act of

1903 to enlarge thé scope of the said contract. Upon the

other hand, if the act of 1903 is to govern in any particu-

lar it must govern in all its provisions and particulars,

and the said Act of 1903 referred to supra, gives the

Water Board power “‘to regulate and fix the water rates—

to make, modify and terminate on behalf of such city all

contracts for the supply of water to such city for domes-

tic, public or fire purposes,” and the Cireuit Court of

Appeals held in Omaha Water Company v. The City of

Omaha, 147 Fed., 1, that said Act did not apply to the

contract between the city of Omaha and the Water Com-

pany. Furthermore, said Act of 1903 as amended in 1905

(Laws of Neb. 1905, p. 173), provided:

“‘Said Water Board shall have the sole power and

authority—inecluding—the acceptance or rejec-

tion of any award resulting from any such ap-

praisement—provided, that no acceptance of an

such appraisement shall be binding upon cach

city unless bonds are voted for the acquisition of

such water plant under such appraisement.’’

The Circuit Court of Appeals, in its opinion in this

case, admits that the Water Board, under the Act quoted

supra, rejected the award in controversy. It seems to us

inconsistent for the court to Say in one paragraph that

the acts of the legislature subsequent to the making of

the contract with the Water Company governed this case,

wherein by implication it enlarges the power to purchase,

or the scope of the purchase, or the terms of the contract

relating to the election to purchase, and then in another

28

part of the same opinion to hold that the provision in

the same law which gives the Water Board the power to

reject the appraisement or the award, does not apply to

the case at bar. In other words, the court cannot invoke

the Act of 1903, as amended in 1905, to sustain the ap-

praisement of the outlying properties, and then reject

the same act of the legislature wherein it puts a limitation

upon the appraisement and award.

Beyond the question above stated there is another

point overlooked by the Court of Appeals in its opinion,

to-wit: that no act of the legislature is referred to and

none is found in the statute books authorizing the city

of Omaha to levy a tax to pay for the outside properties

or to vote for and issue bonds to pay for outlying prop-

erties. The Court of Appeals in its opinion confesses

that the language of the different acts of the legislature

referred to is somewhat ‘‘unhappily chosen,’’ and only

by implication and surrounding circumstances does the

Court conclude that the city has the power to purchase

the outlying properties. The rule of law is to the con-

trary, to-wit: ‘‘That such power must be given in lan-

guage explicit and express or necessarily to be implied

from other powers,’’ and ‘‘a fair and reasonable doubt

of the existence of a corporate power is fatai to its

being.’’

Citizens St. Ry. Co. v. Detroit Ry., 171 U.S., 48-53.

Electric Light & Power Co. v. Grand Rapids, etc.

Co., 32 Fed., 659.

City of Ft. Scott v. Eads Brokerage Co., 117 Fed.,

51.

State v. Irey, 42 Neb., 189.

Sexon v. Kelley, 3 Neb., 107.

The power of the city to purchase the water works

system is limited to that part for which the city of Omaha

29

has power to levy taxes to purchase; (Sutherland-Innes

Co. v. Village of Evart, 86 Fed., 597), and is limited by

the power of the city to that part for which the city of

Omaha would have power to vote an issue of bonds to

pay for.

Ottawa v. Carey, 108 U.8., 121.

No statute is appealed to by our adversaries giving

the city of Omaha the authority to levy a tax or to vote

bonds to pay for the water works properties in South

Omaha, East Omaha and Dundee.

It has many times been held that the power of a

municipality to construct, maintain or operate a system

of water works is confined to the limits of said municipal-

ity and to the supplying of its own people with water, and

that a municipality does not have power to extend a water

works system to other cities or to supply other cities with

water. That rule we believe to be uniform, unless there

is an express statutory provision to the contrary.

Quincy v. City of Boston, 148 Mass., 389.

City of Lawrence v. Town of Methuen, 166 Mass.,

209.

City of Pittsburg v. Bruce, et al., 158 Pa. St., 174.

City of Duluth v. Duluth Gas & Water Co., 45

Minn., 210.

Town of Bristol v. Bristol € Warren Water Works,

49 Atl., 974.

It is no answer to this argument to say, as the Court

of Appeals said, that the municipalities of South Omaha

and Dundee would have no other source of supply of

water. There is no such proof in the record. South

Omaha, under the laws of Nebraska, has the corporate

power to construct its own system of water works, and

to take water from any point on the Missouri River, even

at the same place where the city of Omaha now takes its

30

water, if it elects to do so. The same ten mile limit re-

ferred to by the court in its opinion as indicating that the

city of Omaha has power to purchase the works in South

Omaha, gives the city of South Omaha the right to go

to any point on the River within the same limit to obtain

water. Again the city of South Omaha could obtain water

within the same limit from the Platte River, which river

extends east and west through the entire length of the

state and from which the interior cities along its banks

obtain their water. Furthermore, the city of Omaha and

the city of South Omaha would have the power to con-

tract as between their respective municipalities for the

furnishing of water by the one city to the other, under

the statute as it exists today. There is, therefore, no

necessity at all for putting upon the statute by implica-

tion any forced construction for the purpose of enlarging

the powers of the city of Omaha to the end that the pres-

ent appraisement should be sustained.

It is the settled law of this court that it has the right

to take jurisdiction of a case of this sort by writ of cer-

tiorari at any stage of the proceedings in the United

States Cireuit Court of Appeals, either before or after a

judgment or decree of said court, and independent of the

question whether or not a final decree has been entered.

‘Forsyth v. Hammond, 166 U.S., 506.

We feel that this case is one possessing features

which should appeal to the conscience of the court, and

that its rules of procedure should be viewed in a spirit of

liberality to the end that the City of Omaha and its peo-

ple shall have the judgment of this court upon the ques-

tions involved.

Joun Lee WEBSTER,

Cari C. Wricurt,

Harry BE. Burnam,

Attorneys for the City of Omaha.

supreme Court of the United States.

Tue City or Omana,

Petitioner,

v8.

Tae Omana Warer Company,

Respondent.

Brief in Opposition to Petition for

Writ of Certiorari.

FACTS.

This is an application by the City of Omaha to

review a decision of the Circuit Court of Appeals

for the Eighth Circuit, establishing an appraise-

ment of water works, and directing the comple-

tion of their purchase, under an option exercised

by the city.

By Act of the Legislature of Nebraska, ap-

proved February 27, 1879, the City of Omaha was

given power to erect, construct and maintain wa-

ter works, either within or without the city

limits; also to contract with individuals or cor-

porations to construct and maintain water works,

upon such terms and under such regulations as

might be agreed on (Record on Appeal, pages 2,

19, 764, Appendix, page 38).

Under this authority, the City of Omaha, by

Ordinance No. 423, approved June 11, 1880, grant-

ed the right to any person, company, corporation

or association who should erect, construct and

maintain, in accordance with the report of an en-

2

gineer approved by the City Council, water works

within and adjacent to the City of Omaha, in

Douglas County, State of Nebraska, for the pur-

pose of supplying said city and the citizens and

inhabitants thereof with water for domestic, me-

chanical and fire purposes, and should for twenty-

five years agree to supply the city with water for

fire protection and other public purposes on the

lowest terms, the right of way under the public

streets, alleys, public squares and public places of

the city, for the purpose of placing and repairing

their mains, pipes and other fixtures, including

fire hydrants, during the time any such person,

company, corporation or association, or their as-

signs, should maintain and operate any such wa-

ter works and while constructing the same, upon

the terms and conditions mentioned in the ordi-

nance.

The ordinance contains the following relevant

provisions :

‘‘Section 11. In case of the refusal or neg-

lect of any person, company or corporation,

or their assigns, who shall construct water

works under this ordinance to comply with

the provisions and requirements herein con-

tained, and each thereof, and to keep such

water works in good order and repair, and

ready and fit for immediate and constant use,

in accordance with the requirements of this

ordinance (a reasonable time being allowed

for repairs in case of accident), all rights,

privileges and immunities granted by and ac-

quired under this ordinance shall be forfeit-

ed, and the said city of Omaha shall thereby

be and become vested with the ownership,

possession, control and management of said

water works, and property appurtenant there-

3

to, or connected therewith, subject to the pay-

ment of a just compensation therefor, to be

ascertained as provided in section 14 of this

ordinance; Provided that nothing shall be

paid or allowed for the unexpired franchise

of such person, company or corporation.’’

‘‘Section 14. The city of Omaha shall have

the right at any time after the expiration of

twenty years to purchase the said water

works at an appraised valuation, which shall

be ascertained by the estimate of three engi-

neers, one to be selected by the city council,

one by the water works company and these

two to select the third; Provided that nothing

shall be paid for the unexpired franchise of

said company.”’

(Record, pages 2, 20, 784, 791).

Under the offer thus made, a successful bid was

made by one, Sidney E. Locke, to whom such con-

tract for public supply was made under date of

July 20, 1880 (Record, pages 2, 20, 354, 793).

The rights under this contract were subsequent-

ly assigned by Locke to the City Water Works

Company of Omaha, by which corporation the

works were constructed and completed to the sat-

isfaction of the city, which accepted them Septem-

ber 4, 1883 (Record, pages 3, 21, 389).

The water works and all the rights of the City

Water Works Company were subsequently as-

signed to the American Water Works Company

of Illinois, which, on July 1, 1887, placed a mort-

gage upon the property, which was followed by

a supplemental mortgage on January 16, 1889

(Record, pages 315, 340).

4

In 1860, the City of Omaha, contained about

30,000 inhabitants (Record, page 133). The site

now occupied by the city of South Omaha was

then farm land (Record, page 611).

The plant provided for by Ordinance No. 423

required the erection of a pumping station within

the city limits, which became known as the Burt

Street station, to be equipped with two engines

with an aggregate capacity to pump 5,000,000 gal-

lons each twenty-four hours, and the construction

of a reservoir at Walnut Hill with a capacity of

10,000,000 gallons, and the construction of a dis-

tribution system equipped for public service with

250 hydrants (Record, pages 368 to 384).

Under provisions of the ordinance and contract

requiring the development of the system to keep

pace with the growth of the city, the principal

pumping station was, between 1887 and 1889,

erected at Florence on the Missouri River, some

miles north of Omaha, where, in addition to a

large pumping station, seven extensive settling

basins were built and the river banks were strong-

ly and permanently fortified against danger from

action of the river. (Record, pages 608, 615, 626,

651 to 655, 656, 668, 694).

Florence, although at that time politically a

city, was, and still is, a place of few inhabitants

(Record, pages 504, 505). In connection with the

establishment there of the pumping plant, certain

streets were abandoned by the city for the use of

the settling basins, and other concessions were

made by the city by ordinances providing for the

maintenance by the water company of a distribu-

tion system with hydrants for a permanent public

5

and private water supply (Record, pages 823 to

832).

In connection with the completion of the pump-

ing plant at Florence, the supply main was ex-

tended to South Omaha, in which important in-

dustries were established by Omaha people as

early as 1884, and which by 1886 had become an

incorporated city, into which the streets of

Omaha were virtually extended, with extension

of street railroad tracks. In connection with this

extension an additional pumping station was

erected at Poppleton avenue, in the City of

Omaha (Record, pages 8, 24, 134, 139, 442).

Subsequently, the water works system was ex-

tended to the lands of the East Omaha Land Com-

pany (Record, pages 6, 125, 505).

In 1889, the Village of Dundee, adjoining the

City of Omaha on the west, granted to the water

company the right to extend its mains and pipes

through streets in that village (Record, pages 8,

26, 505).

The American Water Works Company became

beset by financial difficulties, and in 1893 suit was

brought for the foreclosure of its mortgages, and

receivers of its property were appointed. The

suit resulted, in 1896, in a foreclosure sale, at

which the property was purchased by the trustee

of the City Water Works Company and the rest

were to be issued in part payment for the prop-

erty and its subsequent enlargement and im-

provement (Record, pages 221, 222, 231).

For the purpose of the sale a preliminary ap-

praisal of the cash value of the property was

made by two freeholders of Douglas County, who

valued the property as it then was at $5,500,000

(Record, pages 398-402).

The Omaha Water Company authorized two

mortgages to be placed on the property. One was

a prior lien mortgage for not more than $1,500,000,

under which bonds to the amount of $440,000 were

to take up $400,000 in amount of underlying bonds

of the City Water Works Company and the rest

were to be issued in part payment for the prop-

erty and its subsequent enlargement and improve-

ment (Record, pages 221, 222, 231).

The other was a consolidated mortgage for not

more than $6,000,000, under which bonds to the

amount of $3,600,000 were to be issued to com-

plete payment for the property, and bonds to the

amount of $1,750,000 were to be reserved to take

up the $1,500,000 of prior lien bonds, the remain-

ing bonds to the amount of $650,000 to be used for

the enlargement or improvement of the mortgaged

property (Record, pages 243, 252).

Prior to the foreclosure sale the City of Omaha

brought a suit in the United States Circuit Court

for the District of Nebraska for the forfeiture of

the water works system, under the provisions of

Section 11 of Ordinance 423, various grounds of

forfeiture being alleged. In this suit an amended

bill of complaint was filed, after the ;.roperty had

been conveyed to the Omaha Water Company. In

the bill of complaint the city alleged that al! the

property described in the mortgages of the Ameri-

can Water Works Company, then under foreclos-

ure, including its property in Florence and South

Omaha, was ‘‘absolutely essential to the opera-

tion of said water works’’, and claimed the power

to acquire the same by proceedings in condemna-

tion, or by proceedings under section 11 of the or-

dinance, and asked for a decree adjudging that

7

the city had a right to take immediate possession

of all the tangible property of the water works

plant of every kind and nature, including all the

property described in the decree of foreclosure

(Record, pages 763, 770, 779, 782, 340, 342, 346,

797-807, 391-397, 820).

The verified bill of complaint, although mis-

taken in supposing that it was proposed to re-

mortgage the property for $7,500,000, alleged

that ‘‘the value of said property is much greater

than the sum for which the said bondholders’

committee, as shown by said Exhibit F, propose

to remortgage the same, namely, $7,500,000’’

(Record, page 778).

After trial a decree was entered dismissing the

bill on the merits because no ground of forfeiture

was proved (Record, page 29).

It was a question whether the period of twenty

years, upon the expiration of which the City of

Omaha would have the right to purchase the water

works, ran from 1880, when Ordinance 423 was

passed, or from September 4, 1883, when the

works were accepted as completed. Therefore,

under ordinance of January 23, 1900, the City

Council authorized the submission to the electors,

at a general election, the question and proposition

of issuing bonds of the city in the sum of $3,000,-

000 for the appropriation or purchase of water

works or land therefor. The vote was taken with

the result that the president of the City Council

proclaimed, March 9, 1900, that the issuance of

all of said bonds had been duly authorized by the

required vote of the legal electors of the City of

Omaha (Record, pages 194-205).

Meanwhile, and by revision of the City Charter

in 1897, the mayor and council had been given

8

power ‘‘to erect, construct, purchase, maintain and

operate * * * water works * * * either

within or without the corporate limits of the city

* *, imeluding the appropriation of pri-

vate property for the public use in the construc-

tion and operation of the same’’ (Sec. 135), as

well as power to condemn water works property,

including any existing system of water works,

within the city limits and within ten miles from

the city (Sec. 27). Appendix, pages 39, 4/0, 43.

No further steps towards a purchase having

been taken, the legislature of Nebraska passed an

act, approved February 2, 1902, requiririg the city

council of any city of the metropolitan class, Oma-

ha only being intended, that had previogsly voted

bonds for water works, to declare that it was nec-

essary and expedient for the city to ecmstruct or

purchase a system of water works, and: in case of

election to purchase, that such city should acquire

such water works plant either by apy:ropriation

or through the exercise of any right gnuring under

contract. The act also provided for a water board

to exercise jurisdiction over water works, not

only within the City of Omaha but within ten

miles from the city limits (Record, pages 15, 29,

179). Appendix, pages 45, 46, 49, 50. |

Under the Act of 1903, the Governor of Ne-

braska appointed a water board, the niembers of

which organized and took upon themselves the

performance of the duties mentioned in the act

(Record, pages 16, 29).

On March 2, 1903, an ordinance was passed by

the mayor and council of the City of Omaha, en-

titled ‘‘An Ordinance declaring that it is neces-

sary and expedient for the City of Omaha to pur-

chase the system of water works operated by the

9

Omaha Water Company, and providing for noti-

fication by the water board and to said water com-

pany to select one engitteer as an appraiser to as-

certain the value of said water works plant.’’

The mayor and council expressly declared ‘‘that

it is necessary and expedient for said City of

Omaha to purchase the system of water works

operated by the Omaha Water Company, * * *

and do elect and determine to purchase and ac-

quire such water works plant by virtue of the

rights enuring to said city through the contract be-

tween said city and the grantors of said water com-

pany and as authorized and provided by Section 14

of the Ordinance No. 423’’ (Record, page 179).

Thereupon, the mayor and council selected, as

one of the appraisers, for the purpose of ascer-

taining the valuation of said water works plant,

John W. Alvord, of Chicago, an engineer of high

standing and a specialist as a sanitary engineer

(Record, pages 49, 51, 64, 65); and the Omaha

Water Company selected, as the second appraiser

for such purpose, George H. Benzenberg, of Mil-

waukee, holding a prominent position also in Cin-

cinnati, an engineer in the front ranks of munici-

pal engineers, and now president of the American

Society of Civil Engineers (Record, pages 47, 50,

59, 67, 74, 76, 77) ; and the said Alvord and Benzen-

berg selected, as the third appraiser, for such

purpose, Daniel W. Mead, of Madison, an emi-

nent specialist in regard to water works, and pro-

fessor of Engineering in the University of Wiscon-

sin (Record, pages 60, 66, 69, 73, 76, 17, 29, 180).

The appraisers met at Omaha on July 20, 1903,

and organized as a board by the election of Mead,

as chairman, and Alvord, as secretary, and there-

upon received such testimony, as was submitted

10

by the company and the city for the purpose of

fixing the value of the water works. The course

of the appraisers in general was for the water

company to prepare and submit its schedules and

estimates to the representatives of the city, by

whom the various items of property were checked

over, and upon objection to any items by the city

authorities, sworn testimony in support thereof

was given by the company (Record, pages 159,

167, 510, 512, 513).

At the outset, Mr. C. C. Wright, the city at-

torney, submitted to the board of appraisers, on

behalf of the City of Omaha, a suggested outline

of the plan of procedure to be followed in the

appraisal of the Omaha water works. Para-

graph Fourth of this outline is as follows:

‘‘4. As to the matter of the procedure to

be adopted by your board as to the method

of arriving at the amount of property owned

by the water company, and the determination

of its value, the City of Omaha suggests that

this board, having been appointed as experts

in regard to the value of such property,

ought to make a personal investigation as

to the amount and extent of property of the

Water Company, together with its condition,

and determine therefrom its vaiue. As to

the method of arriving at the amount and

condition of the property of the Water Com-

pany, the City of Omaha suggests that this

Board may arrive at such facts by any

method or means deemed advisable by it, but

that, if the board shall determine to take

proof and testimony before it, that it should

go no further than to the question of the

amount and ‘condition of the property, and

that said testimony should not be conclusive

upon this board, but simply for its advice

and information in the matter. It is not the

opinion of the City of Omaha that it would

11

be proper or necessary to call expert wit-

nesses as to the value, since the members of

the board have been selected as experts,

whose judgment the question of value must

be submitted upon the examination of the

property.’’

(Record, pages 161, 162.)

At the close of a series of public hearings, at

which both the city and the water company were

represented by counsel, and a large amount of

testimony was taken and reduced to writing, the

chairman of the board made the following an-

nouncement :

‘‘In closing this session . of the board,

which by common consent of the parties to

this appraisal, is to be regarded as the last

on which formal evidence is to be presented,

and after receiving and listening to the able

arguments of counsel, the matter of this ap-

praisal has been formally handed to this

board, the board wish to call the attention of

the parties to this appraisal to the fact that,

while much work had been already done, that

the work of valuation of this board as a

board has only just commenced. We have

before us some thousand or more plats, dia-

grams, schedules, descriptive matter, some

two thousand pages of evidence, and the ar-

guments of counsel.

It becomes the duty of this board now to

examine in detail these various schedules, to

weigh the evidence presented, to examine the

arguments which have been forwarded from

this mass of matter, to arrange a schedule

on which a valuation can be made by the

board. It is undoubtedly evident to all who

have followed closely these proceedings, that

this will involve a considerable labor; that

12

undoubtedly much more information must be

sought by the board than that already pre-

sented; and that the board will undoubtedly

wish to call on the city and the company for

special information as to details, the neces-

sity for which will develop as the work pro-

ceeds.

In this connection I wish specially to call

your attention to the fact that this is not a

work of days or of weeks, but of months.

While the board will undoubtedly take this

matter up as expeditiously as possible, it

must be recognized that the members of this

board have other demands upon their time

besides that of this appraisal, and I speak

these words simply to make clear the fact

that we recognize that no immediate report

can be made, and that no such immediate re-

port must be expected in this connection.

If there are no further matters to come be-

fore the board the board will stand ad-

journed. I will say in this connection that

the members of the board will probably re-

main in Omaha over Saturday in order to

collect the various exhibits and to prepare

for further work.’’

This was near the beginning of the year 1905

(Record, pages 153 to 155, 166, 167).

On July 7, 1905, the water board and the City

of Omaha filed in the Circuit Court of the United

States for the District of Nebraska, a bill in

equity against the three members of the board of

appraisers and the Omaha Water Company, in

which it was alleged that the board of appraisers

were without power or authority to determine

any matters of law, or to subpoena witnesses, or

compel the production of books and papers in

evidence, and that under the law there was no

provision for any review of their award, either

13

by appeal or error to any of the Courts of the

State of Nebraska or of the United States; and

that serious differences had arisen in and before

the board, involving questions of law and the

construction of the contract under which the ap-

praisement was being made, involving the ques-

tion of the powers and duties of the board under

the contract; and that the members of the board

were divided in their opinion upon the construc-

tion of the contract and upon the question as to

what items of property should properly be in-

cluded in their estimate of the value of the water

works, which questions it was alleged the board

was without authority to determine or adjudi-

cate.

It was further alleged that the City of Omaha

was without the power in law to purchase or op-

erate water works outside of the city, or for the

purpose of supplying any other city or its inhab-

itants, and that the appraisers were at variance

with regard to whether or not such outside prop-

erty should be included, but, unless restrained by

the order of the Court, would make and return

one entire award for all of the property of the

Omaha Water Company, including the property

outside of the city, without segregation of the

separate amounts estimated.

The bili further alleged that the water com-

pany was contending that the estimate of the

value of the property be appraised as of the date

of the passage of Ordinance No. 5162, namely,

March 2, 1903, but that if fixed at such date the

estimate of value would be $200,000 more than if

found and returned as of the date of the award,

or of the submission to the appraisers, to wit, Jan-

uary 3, 1905, but that the water board and the

14

city contended that the award should be made, and

that the estimate of value should be fixed, either

as of the date of the award, or as of said date of

submission.

The bill of complaint further objected to the

inclusion of various property as not necessary

to the water works and claimed that, unless re-

strained by order of the Court, the board of ap-

praisers would improperly return, as part of their

estimate of value, a large sum on account of river

protection at Florence, and include in their esti-

mate improperly a large sum for the going value

of the water works system. Thereupon prayer

was made that it be decreed that the City of

Omaha had no right, power or authority in law to

purchase, own or operate any part of the water

works system belonging to the Omaha Water

Company lying outside of the City of Omaha, and

that it was the duty of the appraisers to estimate

the value of the water works to be purchased, as

of the date when the award should be rendered, or

as of the date of January 3, 1905, and not other-

wise, and that they should exclude from their

return consideration of the value of any pipe sys-

tem or connections with the water plant situate in

adjacent municipalities, and should exclude cer-

tain lands acquired for the erection of an addi-

tional reservoir and other lands, and should allow

nothing for what is termed ‘‘going value’’, or

for the increased value of the mains in the City of

Omaha made necessary for the supplying of ad-

jacent municipalities with water, and should ex-

clude the value of the Poppleton Avenue pumping

station, and the cost of extending land into the

Missouri River, adjacent to the reservoirs at

Florence.

15

Upon this bill a restraining order was granted,

enjoining the appraisers, until final hearing and

disposition of a motion for temporary injunction,

from including in their estimate or award any

amount for the properties or items objected to in

the bill of complaint. (Record, pages 452, 453.)

Upon the bill and answer and return to the mo-

tion for a temporary injunction a decision was

made, in accordance with which an order was en-

tered November 29, 1905, directing the apprais-

ers not only to make one appraisement which

should include the value of all the property of

the Omaha Water Company connected with and

used in connection with its water plant in the City

of Omaha and vicinity, but separate appraise-

ments of its property in the adjacent municipali-

ties, with separate findings of going value, and

that the appraisers should ‘‘make and return the

aforesaid values, as far as practicable under the

evidence and to the best of their judgment as of

the date of the award.’’ (Record, pages 576 to

582). Thereupon, the appraisers resumed work

upon the appraisement.

At a public meeting of the board of appraise-

ers, at which counsel for the city, as well as the

company, were present, counsel for the company

had openly announced that all the books, vouch-

ers and other papers of the water company were

open for examination by the appraisers for their

exclusive and confidential information, for the

sole purpose of the appraisal. (Record, p. 757.)

Thereupon, the three appraisers went to the

company’s office and made a preliminary inspec-

tion of the company’s books, announcing that

they intended to examine them more fully later.

(Record, page 123.)

P- ™.

a ’

%

16

On January 3, 1906, the chairman of the board

of appraisers wrote to. the company that the ap-

praisers would meet in Cincinnati in February,

and asked the company to send its books to that

city at that time. (Record, page 176.)

On learning of this request, the city wrote a

letter objecting to any examination of the books

at Cincinnati by the appraisers alone. (Record,

pages 191 to 193.)

The books, consisting of journals, ledgers, cash

books and voucher registers of the company from

1896 to 1905, being at least thirty volumes, were

sent to the appraisers at Cincinnati, and subse-

quently were sent to Chicago for examination by

an audit company selected by the board of ap-

praisers.

No question has been raised as to the accuracy

of the books, and there is nothing in the evidence

to show what use, if any, was made of their con-

tents by the appraisers. There is no evidence

or claim or suggestion that any use was made of

the books to the prejudice of the city. (Record,

pages 104 to 123, 149, 176, 562 to 567, 757 to 763.)

The board of appraisers made its report under

date of July 7, 1906, returning their valuation as

nearly as possible as of that date. The report

was signed by the appraisers Mead and Benzen-

berg, and to the report was appended: ‘‘I do not

concur in the above report, nor in the values as

fixed therein. John W. Alvord.’ (Record,

pages 178 to 186.)

It appears that all of the appraisers were pres-

ent at all meetings of the board, including the

meeting at which the report was signed, and took

part in the examination of witnesses and in the

17

investigations of the property. (Record, pages

180, 181, 159 to 167.)

The board of appraisers found the value of all

the property of the Omaha Water Company con-

nected with and used in connection with its water

plant in the city of Omaha and vicinity, embrac-

ing all work and material included in the plant to

January 1, 1906, to be $6,263,295.49 (Record,

pages 184, 186).

At the time the appraisal was made, the system

of water works operated by the Omaha Water

Company embraced, besides the original pumping

station and settling basins on the Missouri River

at Burt Street, a re-enforcing pumping station at

Walnut Hill, and a supplementary pumping sta-

tion at Poppleton Avenue, within the City of

Omaha, the main pumping station at Florence,

with its seven settling basins, and equipped with

low service and high service pumps each of a ca-

pacity to pump from the river into the basins,

and from the final basins into the supply mains,

. as much as 20,000,000 gallons a day, and a distri-

bution system of about 230 miles of pipe, supply-

ing a total population of about 175,000, and with

provision for fire protection through 1884 hy-

drants (Record, pages 8, 139, 504 to 525).

Upon ascertaining the amount of the appraise-

ment, the water board, at a meeting held July 9,

1906, adopted resolutions reciting various claims

of illegality with respect to the appraisal, and de-

clared the report to be rejected (Record, pages 186

to 191).

On July 9, 1906, the president of the water com-

pany demanded of the mayor of the City of Omaha

and the president of the water board payment of

18

the amount of the appraisement, and tendered a

deed of the appraised property, and, upon the re-

fusal of the mayor and of the water board to

complete the purchase, filed its bill of complaint

for a specific performance of the contract of pur-

chase (Record, pages 1, 17, 40 to 43, 834).

The city filed an answer to this bill, setting up

as defenses substantially the objections recited in

the resolutions rejecting the appraisement. Repli-

cation was made by the company (Record, pages

19, 40).

Thereupon, testimony was taken, in the course

of which the proceedings on the appraisement were

put in evidence, and the various facts already re-

cited were proved. It was proved, among other

things, that at an early hearing before the board

of appraisers, the chairman of the water board

stated that the city, he believed, wanted to buy

the entire works, and he believed that to be the

opinion of nine-tenths of the city; that they want-

ed to purchase the entire property if they possibly

could do it, and that they expected to do it (Record,

page 755).

The chairman of the water board also testified

that from time to time, while the appraisal was

going on, he had frequent conversations with Mr.

Alvord, the appraiser selected by the city, in which

discussions were had with regard to values, in-

cluding the value of the riprapping and the price

of pipe, and the date for valuation and other mat-

ters relating to the appraisement (Record, pages

555, 559).

Upon the final hearing, a memorandum of opin-

ion was handed down to the effect that the examin-

ation of the company’s books by the appraisers,

19

without permitting the same to be examined by

the counsel for the city ‘‘was such an irregularity

as vitiates the award’’; and without expressing

any views of the Court upon the other questions

raised and argued, except giving value, the Court

directed a decree to be entered, dismissing the

action (Record, pages 208, 209).

Thereupon, a decree was entered accordingly,

dismissing the bill with costs (Record, page 210).

Assigning errors, the water company took an ap-

peal to the Circuit Court of Appeals for the Eighth

Cireuit (Record, pages 210 to 214).

The appeal was heard at the December term,

1907, before Hook and Adams, Circuit J udges, and

Carland, District Judge.

The opinion of the Court, delivered by Hook,

Cirenit Judge, and concurred in by the other

judges, was filed April 7, 1908, directing a reversal

of the decree below, and remanding tlie cause with

direction to proceed to decree, in accordance with

the views expressed in the opinion. The validity of

the purchase of the entire system of water works

operated by the Omaha Water Company, and the

validity of the appraisement were established by

this decision.

Counsel for the City of Omaha has served on

counsel for the respondent copies of a petition to

the Supreme Court of the United States for a

writ of certiorari for the review of the decision

of the Cireuit Court of Appeals, and copies of

a brief in support of the petition, with notice of

submission of the petition and brief on May 18,

1908, assigning as reasons for reversal:

First.—That the appraisal is void because not

concurred in by the three appraisers,

20

Second.—That the appraisal is void because

the books of the water company were examined by

the appraisers under an understanding that the

City or Omaha would not be permitted to see or

know the contents of the books.

Third—tThat the appraisal is void in that it in-

cludes extensions of the water works in the out-

lying municipalities adjacent to the City, for the

sole purpose of supplying those municipalities

with water.

POINT I.

The present case does not fall with-

in any class of cases in which this

Court has been known to review the

judgment of a Circuit Court of Ap-

peals by Writ of Certiorari.

In view of the statements made by the Chief

Justice when the petition for a writ of certiorari

in The City of Omaha et al. v. The Omaha Water

Company was before the Court, and of the de-

nial of the writ in that case, it is assumed that

the rule repeatedly asserted by this Court will

be strictly adhered to.

The City of Omaha et al. v. The

Omaha Water Company, 207

U. 8., 584, 585;

Forsyth v. Hammond, 166 U. S.,

506 ;

Fields v. U. S8., 205 U. S., 292.

21

The language of the Court in the case last

cited applies in all respects to the case in which

a writ of certiorari is now sought.

‘‘In this case there is no sufficient ground

for a certiorari. The application comes

within none of the conditions therefor de-

clared in the decisions of this Court. How-

ever important the case may be to the ap-

plicant, the question involved is not one of

gravity and general importance. There is

no conflict between the decisions of State

‘and Federal Courts, or between those of

Federal Courts of different circuits. There

is nothing affecting the relations of this na-

tion to foreign nations, and indeed no matter

of general interest to the public’”’ (p. 296).

(a) However important the present case may be

to the City of Omaha, the questions involved are

not questions of gravity and general importance.

It is not enough that, as stated in the petition for

the writ, they are ‘‘of great public interest and im-

portance to the 175,000 people”? living in that city

and the adjacent municipalities. It is essential

that the matter be one of general interest to the

public of the nation.

It is obvious that the question as to the power

of the City of Omaha to purchase and pay for

so much of the system of water works it has

elected to buy as lies within the bounds of ad-

jacent municipalities, is necessarily a question

of local statutory construction. It follows that

this Court cannot, in this case, lay down any rule

of construction that will be of general applica-

tion. Every case of municipal authority to con-

struct or purchase and operate water works must

depend upon the constitution and statutes of the

22

State within which the municipality is located,

and, where determined by the highest Court of

that State, is not subject to review by this Court.

As remarked in Missouri, Kansas, &éc. Railway

v. McCann, 174 U. S., 580, 586,

‘‘The elementary rule is that this Court

accepts the interpretation of the Statute of

a State, affixed to it by the Court of last re-

sort thereof.’’

And as was said in Claiborne County v.

Brooks, 111 U. S., 400, 410,

‘Tt is undoubtedly a question of local

policy with each State, what shall be the ex-

tent and character of the powers which its

various political and municipal organiza-

tions shall possess; and the settled decisions

of its highest courts on this subject will be

regarded as authoritative by the courts of

the United States; for it is a question that

relates to the internal constitution of the

body politic of the State.’’

In illustration of the proposition that no rule

of general application can be laid down by this

Court through a review of the decision of the

Cireuit Court of Appeals in the present case,

reference may be made to the decision in Pea-

body v. Westerly Water Works, 20 R. L., 176.

In that case, where a taxpayer of Westerly,

R. L., brought suit to enjoin the purchase by that

town of the plant of the water works company,

located partly in that town and partly in the

neighboring towns of Stonington and North

Stonington, in the State of Connecticut, the Snu-

preme Court of Rhode Island dismissed the bill,

holding the purchase to be valid. It was not

doubted by the Court in that case that the Town

23

of Westerly, under a Statute of Rhode Island,

authorizing the water works company to sell, and

the town to buy, all the property and rights and

franchises of the company, whether situate, held,

enjoyed or exercised by it within or without the

State of Rhode Island, might lawfully both pur-

chase and operate an existing system of water

works, extending not only into adjacent muni-

cipalities, but into an adjacent State, without

the necessity, and in the entire absence, of any

concurrent action on the part of those adjacent

municipalities, or the State in which they were

located.

Should this Court entertain the present mo-

tion, and, on a review of the case, decide that the

City of Omaha had not statutory power to com-

plete in all respects the purchase it has under-

taken to make, could that decision control the

Supreme Court of Rhode Island, if a case simi-

lar to the Westerly case were to come before it?

Would not the earlier decision of that Court be

naturally and properly followed, uninfluenced by

the decision of this Court, except as the reason-

ing of this Court might appear persuasive?

If, moreover, the present purchase of the sys-

tem of the Omaha Water Company were to fail in

consequence of such a ruling by this Court, on such

a review, and a purchase of equal scope were again

attempted by the City of Omaha and the same

question of power were to arise in the Courts of

Nebraska, in a suit by the city to compel the com-

pany to convey its entire system, wherever locat-

ed, on an appraisement satisfactory to the city,

would the Supreme Court of Nebraska be under

any obligation to follow the decision of this Court

on the subject?

24

If the city, in such a suit, were to claim that

under Section 14 of the Ordinance of 1880, it was

entitled to acquire ‘‘all the tangible property of

the water works plant of every kind and nature,’’

wherever located, which in 1896 it claimed it could

acquire by forfeiture under Section 11 of the

ordinance, and the Supreme Court of Nebraska

were to sustain that claim, in spite of the incon- .

sistency of the previous positions taken by the

city, could this Court, upon any theory, review

that determination?

Can this Court, through a review of the decis-

ion in the present case, lay down, even for the Cir-

cuit Courts of Appeal of the country, any general

rule for the government or guidance of those

courts on such questions of municipal authority

as may hereafter arise under the statutes of the

different states within their several circuits?

Must it not, therefore, be held that the princi-

pal question raised in the petition for a writ of

certiorari in this case, does not fall within the

category of questions of such gravity and general

importance as to require review by this Court

through this exceptional procedure?

(b) As there is, in point of fact, no conflict be-

tween federal and state courts, or between dif-

ferent federal courts of appeal, on any question

involved in the present case, so there is, in fact, no

conflict in the decisions of the Cireuit Court of

Appeals for the Eighth Circuit with respect to

any such question.

In holding in Omaha Water Company v. City

of Omaha, 147 Fed., 1, following well established

precedents, that ‘‘in contracting for the construc-

25

tion or purchase of water works to supply itself

and its inhabitants with water, a City is not ex-

ercising its governmental or legislative, but is

using its business or proprietary, powers’’ and

that ‘‘the purpose of such a contract is not to

govern its inhabitants, but to obtain a private

benefit for the City and for its denizens” (p. 5),

the Court held nothing inconsistent with the propo-

sition that the purchase by the City of Omaha of

the Omaha water works is a matter of public con-

cern.

It is submitted that the ruling of the Court in

the rates case was not, as claimed by counse! for

the city in the petition for certiorari, that the

contract for water supply ‘‘was a matter of pri-

vate contract as distinct from one of public con-

cern.’’

It is also submitted that the same Court has not,

as claimed in the petition, held with regard to

the election to purchase, ‘‘that the same contract

between the City of Omaha and the Water Com-

pany is a public contract and of a public nature, as

distinct from a contract between individuals or a

private corporation.’’

All that was held in this regard in the rates case

was that the contract under consideration was

made by the city in the exercise of its business

or proprietary powers "in distinction from its

governmental or legislative powers.

What has been held in the specific performance

suit is that the purchase of the water works under

the contract is not a matter of a governmental or

legislative character, but is nevertheless, from

the nature of the case, a matter of public con-

cern.

26

The essential distinction drawn by the Court in

the specific performance suit, with respect to the

power of a majority of the appraisers to make

a valid appraisement, is the distinction between

the submission of a question of price under a con-

tract, or a matter in controversy, between private

individuals, to three appraisers or arbitrators for

appraisement or determination, and the submis-

sion of similar questions to appraisers or arbi-

trators in matters affecting the interests of a con-

siderable number of persons. For, in a merely pri-

vate matter, failure of the appraisal or arbitration

would leave the parties where they were before,

still free to contract with regard to the subject

matter, or to have their differences determined by

the Courts; whereas, in similar matters affecting

a considerable number of persons, not parties to

the contract or controversy, but members of the

general public, failure of the appraisement or ar-

bitration would leave them without power to con-

summate a purchase by agreement or to enforce

the purchase or secure the determination of the

controversy by resort to the Courts.

Hence, it has been uniformly held that, in a

matter of public concern, considerations of public

policy require that the decision of a majority shall

control, so that the purpose of an appraisement or

arbitration shall not be defeated or delayed in a

case where any considerable number of the public

are interested, but are without means of directly

protecting their interests, or enforcing a contract

which may enure to their benefit.

But it has never been held that the matter in

question must be a matter of governmental or leg-

27

islative character, or a matter of public, as distinct

from private, contract, or a matter which must

concern a community as a body politic, or must

concern the entire community. It is enough in

every such case that the matter in question be

merely a ‘‘matter of public concern,’’ or, as said

in the leading case of Grindley v. Barker, 1 Bos.

& Pul., 229, be ‘‘in some respects of a general

nature.’’ ‘

There is, therefore, no inconsistency whatever

between the holding of the Circuit Court of Ap-

peals in the rates case and its ruling in the spe-

cific performance suit. _

In fact, the only inconsistency observable is in

the position taken by the counsel for the city, who

are applying for a writ of certiorari upon the

ground that the questions involved in the case

“fare of great public interest and importance to

the 175,000 people living in said cities and towns,

and questions which to many of said citizens are

of grave and serious concern”’ (Petition, page 1),

to enable the counsel to argue that the purchase

involved is not a matter of public concern, but of

an entirely private nature, and requiring, there-

fore, the concurrence of all three appraisers.

The question of the validity of the appraise-

ment, in spite of the mere non-concurrence of the

third appraiser, is neither a novel question, nor

one on which there is a real diversity of opinion.

The statement in the petition, that the contract

in Ordinance 423, providing for an appraisal for

the purpose of a purchase, ‘‘by the interpretation

put upon it by everybody connected with this

transaction, contemplated that the valuation

should be ascertained by the joint concurrence of

the three appraisers, and all parties acted on that

theory until the moment that the three appraisers

could not agree’’, is an entirely groundless asser-

tion, if sought to be supported by evidence in the

case. So far as there is any evidence of what

was the understanding of the parties, it is to the

effect that the city counsel of 1880, the legislature

of 1903, the city counsel of 1903, and the water

board must have contemplated that the exercise

by the city of the option to purchase would surely

result in an appraisement and municipal owner-

ship, and that none of these bodies could ever have

thought that such a result could be defeated by

the refusal of one of the appraisers to concur in

the appraisement. The purpose of Ordinance

423 must have been that the city would, beyond

peradventure, ‘‘become vested with the owner-

ship, possession, control and management of said

water works and property appurtenant thereto, or

connected therewith,’’ as certainly through an ap-

praisal for determination of the price upon a pur.

chase under Section 14, as through an appraisal

for determination of the compensation upon a

forfeiture under Section 11. (Record, pages 789,

790.) Is it conceivable that, in case a forfeiture

had been decreed in 1897, and two of the three

appraisers had agreed upon compensation uusat-

isfactory to the company, or a low appraisement

had been made by Messrs. Mead and Alvord, with-

out the concurrence of Mr. Benzenberg, in 1906,

counsel for the city would have accepted the

theory that consequently the forfeiture or the

purchase must fail?

The statement in the petition that ‘‘the law of

the case is universal in both England and Amer-

ica, that a contract worded as in the case at bar,

requires the joint concurrence of all the apprais-

29

ers and that an award by two is void’’, can only

be true of a contract which is a matter entirely

of private or individual concern. Where the mat-

ter is one of public concern, the rule has always

been that a decision of a majority of the apprais.

ers is valid.

Grindley v. Barker, 1 Bos. & Pul.,

229 ;

King v. Beetson, 3 Term., 592;

Withnell v. Gartham, 6 Term., 388;

Green v. Miller, 6 Johns., 39;

Ex parte Rogers, 7 Cowen, 526;

Sinclair v. Jackson, 8 Cow., 543;

Patterson v. Leavitt, 4 Conn., 50;

Young v. Buckingham, 5 Ohio, 485;

Eames v. Eames, 41 N. H., 177;

Phippen v. Stickney, 3 Mete., 384;

People ex rel. Washington v. Nich-

ols, 52 N. Y., 478;

Gas Co. v. Wheeling, 8 W. Va., 320;

Colombia v. Cauca Co., 19 U. &.,

524.

That the acquisition of a system of public

water works by a municipality is necessarily a

matter of public concern is also uniformly held by

the Courts.

As said in Long Island Water Supply Co. v.

Brooklyn, 166 U. S., 685, ‘‘that the supply of

water to a city is a public purpose cannot be

doubted’’ (p. 689).

To the same effect are:

Minneapolis Mill Co. v. Board of

Water Commrs. of St. Paul, 56

Minn., 485;

30

Winters v. City of Duluth, 82 Minn.,

127;

Slingerland v. Newark, 54 N. J. L.,

62;

Kennebec Water District v. Water-

ville, 96 Me., 234;

Munn v. Illinois, 94 U.S., 113;

Budd v. N. Y., 143 U.S., 517.

(c) There is no novel question involved in the

methods or procedure of the appraisers in this

case, nor is there anything in the circumstances

of the case to make it either necessary or desir-

able that this Court lay down a new rule for the

general guidance of appraisers.

There can be no doubt that it is the general rule

in cases of arbitration, resting on a long line of

decisions, that the parties to the controversy must

have notice of hearings before the arbitrators,

and that the witnesses must be examined under

oath, unless the taking of an oath be waived, and

must be examined in the presence of the parties,

who have the right of cross examination; al-

though, even in cases of arbitration, the strict

rules governing the trials and decisions of Courts

are not always applied.

People ex rel. Bliss v. Board of Su-

pervisors, 15 N. Y. Supp., 748;

Hall v. Norwalk Fire Insurance Co.,

57 Conn., 105.

It is equally true that there is a clear and vital

distinction between an arbitration and an ap-

praisal, and that this distinction runs through the

proceedings from beginning to end; that it con-

31

cerns the origin and nature of the proceeding, the

official character of the persons who are chosen

to determine the matter submitted, the rules gov-

erning their procedure and method of determina-

tion, and the quality and effect of their decision.

This distinction is firmly established by the de-

cisions of a number of Courts of high authority—

wherever, indeed, the question appears to have

been raised.

It is stated in Fry on Specific Performance, 2nd

Edition, as follows:

‘‘Sec. 341: The persons nominated to

value are sometimes, though inaccurately,

spoken of as arbitrators, Arbitrators are ap-

pointed to settle a pre-existing dispute; valu-

ers to ascertain the value of the subject-matter

of the sale.’’

In support of this distinction, the following

cases may be cited:

Eads v. Williams, 4 De Gex, Mac-

Naghten & Gorden, 674;

Green &¢ Coates Streets Pass. Ry. Co.

v. Moore, 64 Pa., 79;

Kelly v. Crawford, 5 Wall. (S. C.),

785 ;

Palmer v. Clark, 106 Mass., 373;

James v. Schroeder, 61 Mich., 28;

Noble v. Grandin, 125 Mich., 383;

Guild v. Railroad Co., 57 Kansas, 70;

Wurster v. Armfield, 175 N. Y., 256;

Norwich Gas & Electric Co. v. The

City of Norwich, 76 Conn., 565.

This distinction, and the consequently broad

discretion allowed appraisers, are so well estab-

32

lished and so widely recognized that they were

unhesitatingly announced to the Board of Ap-

praisers at an early meeting, by the city attor-

ney, representing the City of Omaha in the ap-

praisement proceeding.

At that meeting, as appears from the record in

the present case, Mr. Wright submitted to the

appraisers a written outline of the plan of con-

ducting the appraisal, which the city desired to

have adopted. In that plan, he made the follow-

ing statement, with reference to the nature of the

proceeding :

‘As to the matter of the procedure to be

adopted by your board as to the method of

arriving at the amount of property owned by

the water company, and the determination of

its value, the City of Omaha suggests that

this board, having been appointed as experts

in regard to the value of such property,

ought to make a personal investigation as to

the amount and extent of property of the

water company, together with its condition,

and determine therefrom its value. As to

the method of arriving at the amount and

condition of the property of the water com-

pany, the City of Omaha suggests that this

board may arrive at such facts by any

method or means deemed advisable by it, but

that, if the board shall determine to take

proof and testimony before it, that it should

go no further than to the question of the

amount and condition of the property, and

that said testimony should not be conclusive

upon this board, but simply for its advice

and information in the matter. It is not the

opinion of the City of Omaha that it would

be proper or necessary to call expert wit-

nesses as to the value, since the members of

the board have been selected as experts, to

whose judgment the question of value must

33

be submitted upon the examination of the

property’’ (Record, p. 162).

Although it appears from the pleadings and so

much of the proceedings in the appraisement suit

as have been made a part of the record in this

case, that nearly every conceivable question which

could be suggested with reference to the procedure

and conduct of the appraisers was raised, no doubt

was expressed as regards their discretion in their

methods of procedure and manner of obtaining

information for the purposes of the appraise-

ment. Only through the exigencies of litigation

have counsel for the city felt compelled to change

their attitude and question the methods of the

appraisers, in which all of the appraisers joined

and from which no prejudice whatever to the

city is shown or claimed to have resulted.

There is, therefore, no doubtful question of gen-

eral law or proper procedure arising in this case

by reason of any conduct of the appraisers, nor is

there any general principle, based upon the special

circumstances of this case, which properly calls

for statement or elucidation by this Court.

(d) The amount of money involved in this

special case affords no ground for exceptional re-

view through a writ of certiorari.

Except for vague charges that the appraise-

ment is excessive, there is no basis whatever for

any suggestion that there has been an overvalua-

tion of the water works in question. In no par-

ticular is it charged that the appraisers have

been biased or have reached a conclusion con-

trary to the facts. All that is definitely averred

against the report in this regard is that outlying

34

properties have been improperly included and

that certain pieces of real estate within the city

limits are not essential to the system, and that

no allowance should have been made for what is

known as ‘‘going value.’’ It is not even hinted

that the city was prejudiced to any pecuniary ex-

tent by such examination as the appraisers

made of the company’s books. So far as that ex-

amination has been made a ground of objection

to the appraisement, it has been urged by way of

bare technicality. The charge is unsupported by

evidence and baseless in fact, and is also a

wanton insult to engineers of the highest rank

in their profession that, in the language of the

petition for the writ of certiorari, ‘‘the incident

complained of did not give the city a square

deal.’’

While refusing to concur in the report and val-

uation of the other appraisers, the third ap-

praiser does not impeach in any respect the ap-

praisal in which he had shared from the begin-

ning to the end, nor criticise the estimate of any

item of property.

On its face, there is nothing inordinate in a

valuation of $6,263,000 of a system of water

works embracing four pumping stations,

equipped with pumps capable of pumping and

distributing more than 20,000,000 gallons of

water daily; seven settling basins; a reservoir

with a capacity of ten million gallons; a distri-

bution system more than 230 miles in length, con-

necting with more than 1800 hydrants; a system

supplying approximately 175,000 people with water

for domestic and mechanical uses and fire pro-

tection and other public purposes. When it is con-

sidered that this system, more than ten years

35

ago, was valued by sworn appraisers for the pur-

pose of sale at auction at $5,500,000, and was

then declared in a verified pleading of the City

of Omaha to be worth more than $7,500,000, and

is mortgaged for nearly the amount of its pres-

ent value, as found by the appraisers, it is idle to

talk about an excessive valuation.

The act of 1903 was passed by the legislature of

Nebraska, and the option to purchase was, in the

same year, exercised by the mayor and city coun-

cil of Omaha, with necessarily full knowledge of

these notorious facts. The mayor and council then

deliberately chose to acquire this system of water

works by virtue of the right of purchase reserved

by contract, involving the determination of the

price by the appraisement of three engineers, in-

stead of by appropriation under the powers grant-

ed by the city charter (Act of 1903, Sec. 3).

Because the City Council of Omaha, in 1900,

saw fit to submit to the electors the question of

issuing bonds to the amount of only $3,000,000,

for the purpose of acquiring the water works, is

no reason for regarding double that sum as an

excessive valuation. It was scarcely to be ex-

pected that the city would suggest more than a

minimum price. Even the Act of 1903 recog-

nized the improbability of any such low valua-

tion, and expressly provided that if at any stage

of the proceeding for acquisition of the water

works, it should appear that the amount of bonds

previously voted would be insufficient, the elec-

tors should have the opportunity to vote for the

issue of enough additional bonds to complete the

purchase (Act of 1903, Sec. 4, Appendix, page 46).

Therefore, in absence of any novel questions of

law or need or possibility of declaring in this case

36

any general rule of statutory construction, there

is no reason why this Court, or any Court, should

undertake to review an appraisement made by

experienced engineers chosen in accordance with

the terms specified by the City of Omaha in the

original ordinance, and made for the purpose of

a purchase resolved upon by the city in the exer-

cise of an option which the water company was

powerless to prevent.

POINT II.

The present application should not

be allowed to serve the purpose of a

stay of the proceedings which, by

the opinion of the Court of Appeals,

the Circuit Court is directed to

take.

Under the circumstances the motive of delay

seems more obvious than any hope on the part of

counsel for the applicant that the writ of cer-

tiorari will be granted. It can scarcely be doubt-

ed that the pendency of the application will be

urged, with fair prospect of success, as a reason

for postponement of further proceedings. Thus

the water company will continue to be unable, as

it has been for the last five years, to derive full

benefit of the ownership of its property, because

of inability to extend and develop the works

while under appraisement, and provision for pay-

ment and possession and operation by the city

willbe indefinitely postponed—with a vista of fur-

37

ther litigation, but with real advantage to neither

the water company nor the city.

POINT III.

The petition for a writ of certiorari

in this case should be denied.

Howarp MansFIELp,

R. 8. Hat,

Of Counsel for Respondent.

38

Appendix.

The following portions of Statutes of the State

‘of Nebraska cited in the foregoing brief are

printed for reference, under the rule:

Act or 1879.

‘*An Act Entitled ‘An Act to amend Section

Fifteen (15) of an Act entitled ‘‘An Act to incor-

porate cities of the First Class,’’’ approved

March 28, 1873 (General Laws of 1879, p. 95).

‘*Be it enacted by the Legislature of the State

of Nebraska:

‘‘That Section Fifteen (15) Chapter Eight (8)

of the general statutes of Nebraska, entitled ‘An

act to incorporate cities of the first class,’ ap-

proved March 28, 1873, be amended so as to read

as follows:

‘‘Section 15. The mayor and council of each

city created or governed by this act shall have

the care, management and control of the city and

its property and finances, and shall have power

to pass any and all ordinances not repugnant to

the constitution and laws of this State, and such

ordinances to alter, modify or repeal, and shall

have power: * *

‘697. To erect, construct and maintain water

works, either within or without the corporate

limits of the city, and to make all needful rules

and regulations concerning the use of water sup-

plied by such water-works, and to do all acts

necessary for the construction, completion, man-

agement and control of the same * * * and

the mayor and council of each city created or

39

governed by said act shall have power to con-

tract with and to procure individuals or incor-

porations to construct and maintain water-works

on such terms and under such regulations as may

be agreed on’’ (p. 99).

CuHarTEeR oF OMAHA Prior To LecisLatTion or 1903.

‘*Sec. 27. The mayor and council shall have

power to provide for keeping the sidewalks clean

and free from obstructions and accumulations

and may provide for the assessment and collec-

tions of taxes on real estate, and for the’sale and

conveyance thereof to pay the expenses of keep-

ing the sidewalk adjacent to such real estate

clean and free from obstructions and accumula-

tions, as herein provided. To provide for the

planting and protection of shade or ornamental

and useful trees, and for the protection of birds,

their nests and eggs. To provide for, regulate

and require the numbering or renumbering of

houses along public streets or avenues; to care

for and control, to name and rename streets,

avenues, parks and squares within the city, to

provide for the opening, vacating, widening and

narrowing of streets, avenues and alleys within

the city, under such restrictions and regulations

as may be provided by law. Provided, That no

street or avenue shall be narrowed to a width

of less than sixty-six feet, except on petition of

two-thirds of the owners of the lots and real es-

tate along that portion of the street or avenue

narrowed. To appropriate private property for

the use of the city for streets, alleys, avenues,

parks, parkways, boulevards, sewers, public

squares, market places, gas works, electric light

plants or water works, including mains, pipe

40

lines, and settling basins therefor, the right and

power to appropriate private property for

sewers, parks, parkways, boulevards, electric

light plants and water works, to extend for a dis-

tance of ten miles from the corporate limits of

the city; they shall also have power to appro-

priate any water works system, plant or prop-

erty already constructed, to supply the city and

the inhabitants thereof with water, or any

part thereof, whether lying or being wholly with-

in said city or in part therein and in

part without the city, and within ten miles

from the corporate limits of such city, including

all real estate, buildings, machinery, pipes,

mains, hydrants, basins, reservoirs and all ap-

purtenances reasonably necessary thereto, and a

part of, or connected with, said system, plant or

property, and franchises to own and operate the

same, if any. All cities of the metropolitan class,

upon condemning private property under such

authority, shall cause to be recorded an accurate

plat and a clear, definite description of the prop-

erty so taken in the office of the register of deeds

of the county within which such city is located,

within sixty days after the other legal steps for

the acquisition of such title shall have been

taken.”’

‘‘See. 101b. In each city of the metropolitan

class there shall be a board of park commission-

ers who shall have charge of all the parks and

public grounds belonging to the city, with power

to establish rules for the management, care and

use of public parks, park ways and boulevards,

and it shall be the duty of said board from time

to time to devise, suggest and recommend to the

mayor and council a system of public parks,

‘41

parkways and boulevards or additions thereto

within the city, or within three miles of. the lim-

its thereof, and to designate the lands, lots or

grounds necessary to be: used, purchased: or..ap-

propriated for such purpose. And. thereupon it

shall be the duty of the mayor.and council to take

such action as may be necessary for. the .appro-

priation of the lands, lots or.ground so _ desig-

nated, the power to appropriate lands, lots or

ground for such purpose being hereby conferred

on the mayor and council, and for the purpese of

making payments for such lands, lots or grounds

so appropriated or purchased as hereinafter. pro-

vided, assess such real estate as may. be specially

benefitted by reason of the appropriation or pur-

chase thereof.for such purpose, and issue. bonds

as may be required for such purpose, to the ex-

tent and amount required in excess of such as-

sessment. ‘And the mayor and council are fur-

ther authorized upon the recommendation of

said park commissioners and with their concur-

rence to purchase in the name of said city, lands,

lots or grounds within the limits herein desig-

nated to be used and improved for parks, park-

ways or boulevards, notwithstanding said limits

include lands, lots or grounds within the corpor-

ate: boundaries of other cities or villages, and if

such lands, lots or grounds are in the limits of

other cities or villages, said cities or villages

shall cease to have jurisdiction over the said

lands, lots or grounds after the said lands, lots or

grounds are acquired for parks, parkways or

boulevards as aforesaid by gift, purchase, con-

demnation or otherwise; and for the purpose of

paying for and improving lands, lots or grounds

purchased or appropriated for parks, parkways

or boulevards the mayor and council may issue

42

bonds for such purpose to an amount necessary,

not to exceed fifty thousand ($50,000) dollars

per year, said bonds to be designated and known

as ‘‘Park Bonds, Series

be issued and used in accordance with the pro-

visions governing the issuance of sewer, funding,

and other public improvements bonds by this act

contemplated. Provided, no such bonds shall be

issued until the question of the issuing of the

same has been submitted to the electors of the

city at a general or special election therein, and

authorized by a vote of two-thirds (2/3) of

the electors voting on said question at such elec-

tion. When improvements are made upon or in

streets, or sidewalks adjacent to, and abutting

upon, parks, parkways or boulevards and similar

grounds in the charge control of said board of

park commissioners, the cost or expense of

which would otherwise be chargeable to the city,

the same shall be paid from the park fund tax

herein provided; and said commissioners are

hereby directed to pay the cost of such

improvements. Said board of park commission-

ers shal! be composed of five members, who shall

be resident freeholders of such city, and who

shall be appointed by the judges of the district

court of the judicial district in which such city

shall be situated. ‘The members of said board

shall be appointed by said judges, a majority of

said judges concurring, but the members of said

board heretofore appointed and now acting shall

hold their office for the full time for which they

were appointed under the law heretofore enforced,

and vacancies occurring from expiration of their

term shall be filled by further appointments by

said judges for the term of five years; it shall be

the duty of said judges, a majority concurring, to

43

appoint or reappoint, one of said board each year

on the second Tuesday of May, and to fill for the

unexpired term any vacancies existing in the

board. A majority of all the members of the board

of park commissioners shall constitute a quoram.

It shall be the duty of said board of park commis-

sioners to lay out, improve and beautify all lands,

lots or grounds now owned, or hereafter acquired

for parks, parkways or boulevards. They may

employ a secretary and such landscape gardeners,

superintendents, engineers, keepers, assistants or

laborers, that may be necessary for the proper care

and maintenance of such park, parkways or boule-

vards, or the improvements or beautifying thereof,

to the extent that funds may be provided for such

purpose. The members of said board at its first

meeting each year after the first Tuesday in May

shall elect one of their own members as chairman

of said board. Before entering upon their duties

each member of said board shall take an oath to be

filed with the city clerk, that he will faithfully per-

form the duties of his appointment and in the ge-

lection or designation of lands, lots or grounds for

parks, parkway or boulevards, and in making ap-

pointments he will act for the best interests of such

city and the public, and will not in any manner be

actuated or influenced by personal or political mo-

tives. The members of said board shall receive

no compensation and serve without cost to the

city.’’

‘‘See. 135.—The mayor and council shall have

power to erect, construct, purchase, maintain and

operate subways and condue(i)ts, water works,

gas works and electric light plants, either within

or without the corporate limits of the city, and

shall have power to fix, charge and collect a rentg]

44

or-compensation for the use of subways or con-

duits and of water,.gas or electric lights furnished

consumers, and to make all needful rules and regu-

lations coneerning the use of -such subways, con-

duits, water, gas or electric lights and to do all

acts necessary for the construction, completion,

management and control of the same, including the

appropriation of private property for the public

use in the construction, and operation of the same,

compensation for such appropriation to be made

as is provided by this act and. the mayor and coun-

cil of each city created or governed by this act

-Shall have power to provide by ordinance or con-

‘tract’ with any competent party for the supplying

and furnishing of ‘water, gas: or electric light, or

electric power to the public or. private consumers

within-such city, and the. rates, terms and condi-

tions upon which the-same may and shall. be sup-

plied and furnished. during the period named in

the ordinance or contract,.as provided in section

nineteen. ’’

Laws or Nesraska, 1903; Cuaprer 12.

A. BiLy ‘For

An Act. to provide in cities of the metropolitan

class, viz. :

1. For the procedure in certain cases, by the

‘mayor’and council in the acquisition of a munici-

pal water plant:

‘2.’ For the creation of a water board, its organ-

ization, its powers, its duties, and the compensa-

tion of its members and employees.

45

3. Penalties for interference with water plant,

or employees of water board in the discharge of

their duties :

4. For a Water Fund, its revenues, and the dis-

bursement and application thereof:

And amending Sections 16, 24, 25, 29, 32, 33,

35, 67, 72, 86, 87, 89, 93, 94, 100, 101a, 135, 138

and 140 of an act entitled ‘‘An Act incorporating

metropolitan cities and defining, prescribing and

regulating their duties, powers and government,

and to repeal an act entitled ‘An Act incorporat-

ing metropolitan cities, and defining, regulating

and prescribing their duties, powers and govern-

ment,’ ‘‘approved March 30, 1887, and all acts

amendatory thereof, being Chapter 12a of the

Seventh edition of the Compiled Statutes of the

State of Nebraska (edition of 1895), entitled

‘Cities of the Metropolitan Class,’ approved

March 15, 1897, being Chapter 12a of the Tenth

edition of the Compiled Statutes of the State of

Nebraska (edition of 1901), entitled ‘‘The Com-

piled Statutes of the State of Nebraska, 1881,

(Tenth edition), with amendments 1882 to 1901,

comprising all the laws of a general nature in

force July 1, 1901, published under authority of

the legislature by Guy A. Brown and Hiland H.

Wheeler,’’ and certified to by Hiland H. Wheeler,

compiler of date July 1, 1901, and repealing said

original sections.

Be rr Ewnactep sy THE LEGISLATURE OF THE STaTE

or NEBRASKA:

Section 1. (Bonps ror Construction orn Por-

cHasE oF Water Puiant.) In any city of the me-

tropolitan class which has heretofore voted or

46

may hereafter vote bonds for the construction

or purchase of a water plant it shall be the

duty of the mayor and council, and the mayor

and council shall within thirty (30) days after

the election at which such bonds are or have been

voted, or in case such bonds have been hereto-

fore voted, then within thirty (30) days after this

act shall take effect, declare by ordinance that it

is necessary and expedient for such city to con-

struct or purchase, as the case may be, a system

of water works.

Sec. 3. (Meruop or Purcuasinea.) In case bonds

are or have been heretofore voted for the pur-

chase of a water plant it shall be the duty of the

mayor and council, and the mayor and council

shall, beginning at the first meeting of the council

after the approval of said ordinance, proceed to

take the necessary steps to acquire such water

plant under the powers granted by the charter of

such city, or by virtue of any rights inuring to

such city through contract or otherwise; and if

at any stage of the proceedings instituted to ac-

quire such water plant, the mayor and council

shall, unduly or unreasonably delay, then and in

such case, said mayor and council may be com-

pelled to act by mandamus at suit of the water

board of such city; and, further, if at any stage of

the proceedings it shall be ascertained that the

bonds hereafter or heretofore voted for the con-

struction or purchase of said water plant are in- -

adequate in amount, then, it shal] be the duty of

the mayor and council, and mandatory thereon, to

submit to the voters of such city, in the manner

prescribed by law, a proposition for the issuance

of bonds in such further amount as may be neces-

sary for the construction or purchase of such wa-

ter plant, as the case may be.

47

Sec. 4. (AppraiseMENT). If the method of pro-

cedure adopted by the mayor and council for the

acquisition of such water plant shall involve the

appointment of one or more appraisers by the

council, or by the mayor and council, then, and in

such case, it shall be the duty of the mayor and

council to at once notify the water board stating

the number of appraisers to be appoint-

ed. Upon receipt of such notification the

water board shall propose for appointment,

by the council, or by the mayor and council,

as the case may be, at the time of the next regu-

lar meeting of said council, the names of as many

appraisers as may be indicated in said notifica-

tion. And it shall be the duty of the council, or

the mayor and council, as the case may be, to ap-

point or reject, at the time of such meeting, the

appraiser or appraisers so proposed by said

board. In case of rejection of all or any one of

the appraisers proposed, as herein provided, it

shall be the duty of the water board, at the time

of every regular meeting of the council thereafter,

to propose another or other appraisers for ap-

pointment, and so to continue until the full num-

ber of appraisers shall have been appointed by

the council, or by the mayor and council, as the

case may be. No such appraiser or appraisers

shall be appointed by the council, or by the mayor

and council, unless such appraiser or appraisers

shall have been first proposed by said water

board; neither shall any appraisement of said

water plant be submitted to the people of such city

for ratification or rejection unless the same shall

have been, also, first approved by said board. If

the method of procedure adopted by the mayor

and council for the acquisition of such water plant

48

shall involve, by reason of contract, the appoint-

ment of any appraiser or appraisers by the cor-

poration, partnership, or individual or individuals

owning such water plant, and the said corpora-

tion, partnership, individual or individuals shall,

for thirty (30) days after such appointment of

an appraiser or appraisers should, under the con-

tract, have been made, fail to appoint such ap-

praiser or appraisers, then in such case, the water

board, representing the rights of the city in the

premises, shall have authority, and it shall be their

duty, to bring appropriate proceedings in the dis-

trict court of the county in which such city is lo-

cated to compel the said owner or owners of such

water plant to appoint such appraiser or apprais-

ers, or upon their failure then so to do, to have

such appraiser or appraisers appointed in their

behalf by the court or judge before whom sucb

action is brought. Such action both in the dis-

trict court and in the supreme court, if such action

shall be taken to the supreme court, on appeal or

writ of error, shall take precedence for trial over

all other cases on the dockets of such courts and

be advanced for hearing as soon as at issue.

See. 5. (Exection or Water Boarp).—In each

city of the metropolitan class owning and operat-

ing a municipal water plant, or which has hereto-

fore voted or may hereafter vote bonds for the

construction or purchase of a municipal water

plant, there shall be a water board consisting of

six (6), two of whom shall be elected at the time

of each general state election held in the even

numbered years, one from each of the two political

parties casting the greatest number of votes for

Governor at the last preceding general election.

49

Merabers of said board shall hold office for a

period of six (6) years from the first Tuesday

after the first Monday of January following their

election, and until their suecessors shall be elect-

ed and qualified ; provided, however, that the mem-

bers of the first board shall be appointed in such

manner and for such terms as hereinafter set

forth.

Sec. 6. (ApPoInNTMENT oF First Water Boarp).

—The Governor shall appoint the members of the

first water board, all of whom shall be electors of

such city, two to serve from the date of their ap-

pointment for four years, and two from the date

of their appointment for two years, from the first

Tuesday after the first Monday of January fol-

lowing the general election held in the even num-

bered years, next after their appointment; and

two to serve until said first Tuesday after the

first Monday following the general election, held

in the even numbered years, next after their ap-

pointment. One member for each term herein

designated, shall be appointed from each of the

two political parties casting the greatest number

of votes for Governor at the last preceding elec-

tion. Such appointments shall be made within

thirty (30) days after the election at which bonds

shall have been voted for the construction or pur-

chase of a municipal water plant, or if such bonds

have been heretofore voted, or if such city has

heretofore acquired a municipal water plant, then

within thirty (30) days after this act shall take

effect.

Sec. 10. (Powers or Boarp)—The water

board shall have general charge, supervision, and

50

control of the design, construction, operation,

maintenance and extension or improvement of

any water plant owned and operated by such city,

including the power to purchase and contract for

necessary material, labor and supplies, and this

power shall not be subject to the approval or ac-

tion of the mayor and city council; but no new

construction or extension of such water plant

shall be undertaken, involving the expenditure of

more than five hundred dollars ($500) without the

approval of the mayor and council, neither shall

any extension or improvement of such water plant

be undertaken without the approval of said board;

provided, that nothing herein contained shall be

construed as prohibiting said board from pre-

paring or providing engineering plans and speci-

fications, for any such proposed construction, ex-

tension or improvement, or for the purpose of

making any estimates which said board may deem

necessary, without such approval. The author-

ity and powers herein conferred upon the water

board shall extend as far beyond the corporate

limits of said city as said board may deem neces-

sary, not to exceed ten (10) miles.

Seo. 12. (Water Rates anp Service Fres).—It

shall be the duty of the water board and the water

board shall be charged with the determinatioa

of water rates, the conditions and methods of

water service, and the collection of all charges for

water service, or the sale of water; provided, that

all payments on account of water service, or the

sale of water, and all other receipts of the board

from whatever source, shall be received and re-

ceipted for by the city treasurer, or by an em-

ployee of the city treasurer’s office, who shall be

assigned by said treasurer for such purpose. The

51

water board shall have authority to make such

rules and regulations for the conduct of the water

plant, and the use and measurement of water

supplied therefrom as it may deem proper, and

shall also have authority to cut off any water ser-

vice for non-payment or non-compliance, on the

part of the water user, with the rules and regu-

lations adopted by the board for the conduct of

its business and affairs.

Sec. 14. (Inrerreninc with Puant or Em-

PLOYEE).—Any person who shall wilfully interfere

with or obstruct an employee of the water board

in the discharge of his duties, or who shall wil-

fully tamper with or injure such water plant, or

the pipes connected therewith, shall be deemed

guilty of a misdemeanor and shall, on conviction

thereof, be punished by a fine of not over one hun-

dred dollars ($100.00), or imprisonment in the

county jail not over sixty (60) days, or both such

fine and imprisonment in the discretion of the

court.

Sgro. 18. (Water Funp, Levy, erc.).—The water

fund shall consist of all moneys received on ac-

count of the water plant for water service or

otherwise, together with a water tax to be levied

—in lieu of the ‘‘fund for paying water rented

for fire purposes and for public use’’--by the

mayor and council, at the same time, and as in

the case of other funds provided for city purposes

under the provisions of the charter of such city,

the amount of said tax to be certified to the mayor

and city council by the water board on or before

the second Tuesday in January in each year, and

not to exceed the sum of one hundred thousand

dollars ($100,000), and it shall be mandatory upon

52

the mayor and council to levy the same as above

provided. Such fund, together with any interest

received thereon, shall be used only for the pur-

pose of paying interest on any water bonds is-

sued by the city, the cost of operation, mainten-

ance and extension or improvement of the water

plant, and the salaries and experses of the water

board, its employees and assistants as herein pro-

vided. The balance remaining in the water fund

at the end of each year shall be placed in a sink-

ing fund, provided for the payment of any out-

standing water bonds of such city, or for extraor-

dinary improvements of the water plant.

Sec. 19 (Ssctions Amenpep).—That sections 16,

24, 25, 29, 32, 33, 35, 67, 72, 86, 87, 89, 93, 94, 100,

101a, 135, 138 and 140 of an act entitled ‘‘ An act

incorporating metropolitan cities, and defining,

prescribing and regulating their duties, powers

and government, and to repeal an act entitled ‘An

act incorporating metropolitan cities, and defining,

regulating and prescribing their duties, powers

and government,’ approved March 30, 1887, and

all acts amendatory thereof, being chapter 12a of

the seventh edition of the Compiled Statutes of

the State of Nebraska (edition of 1895) entitled

‘Cities of the Metropolitan Class,’ approved

March 15, 1897, being chapter 12a of the tenth

edition of the Compiled Statutes of the State of

Nebraska (edition of 1901), entitled ‘‘The Com-

piled Statutes of the State of Nebraska, 1881 (tenth

edition), with amendment 1882 to 1901, compris-

ing all laws of a general nature in force July 1,

1901, published under authority of the legislature

by Guy A. Brown ynd Hiland H. Wheeler,’’ and

certified to by Hiland H. Wheeler, compiler of

53

date July 1, 1901, be and the same are hereby

amended to read as follows:

Szo. 135 (Duties or Counci.).—The mayor and

council shall have power to erect, construct, pur-

chase, maintain and operate subways or conduits,

water works, gas works and electric light plants

either within or without the corporate limits of

the city, and shall have power to fix, charge and

collect a rental or compensation for the use of sub-

ways or conduits and of water, gas or electric

lights furnished consumers, and to make all need-

ful rules and regulations concerning the use of

such subways, conduits, water, gas or electric

lights and to do all acts necessary for the construc-

tion, completion, management and control of the

same, including the appropriation of private prop-

erty for the public use in the construction, and op-

eration of tue same, compensation for such ap-

propriation to be made as is provided by this act

and the mayor and council of each city created or

governed by this act shall have power to provide

by ordinance or contract with any competent party

for the supplying and furnishing of water, gas or

electric light, or electric power to the public or

private consumers within such city, and the rates,

terms and conditions upon which the same may

and shall be supplied and furnished during the

period named in the ordinance or contract, as pro-

vided in section nineteen. (Water Board of Para-

mount.) Provided, that nothing in this section

contained shall be so construed as to interfere with

the powers, duties, authority and privileges, con-

ferred and imposed upon the water board as pre-

scribed by law, but in all matters relating to the

purchase, construction, maintenance and manage-

~

54

ment of a water works plant for such city or in any

way appertaining thereto, the said powers, duties,

authority and privileges of such water board so

far as elsewhere conferred, imposed and defined by

law shall be exclusive and paramount.

Sec. 20 (Repeatinc Ciause).—That said sec-

tions 16, 24, 25, 29, 32, 33, 67, 72, 86, 87, 89, 93,

94, 100, 10la, 135, 138 and 140 of said act entitled

‘*An act incorporating metropolitan cities and de-

fining, prescribing and regulating their duties,

powers and government,’’ and to repeal an act

entitled ‘‘ An act incorporating metropolitan cities,

and defining, regulating and prescribing their

duties, powers and government,’’ approved March

30, 1887, and all acts amendatory thereof, being

chapter 12a of the seventh edition of the Com-

piled Statutes of the State of Nebraska (edition

of 1895) entitled ‘‘Cities of the Metropolitan

Class,’’ approved March 15, 1897, being chapter

12a of the tenth edition of the Compiled Statutes

of the State of Nebraska (edition of 1901) en-

titled ‘‘The Compiled Statutes of the State of

Nebraska, 1881 (tenth edition), with amendments

1882 to 1901, comprising all laws of a general

nature in force July 1, 1901, published under au-

thority of the legislature by Guy A. Brown and

Hiland H. Wheeler,’’ and certified to by Hiland

H. Wheeler, Compiler of date July 1, 1901, as here-

tofore existing be and the same are hereby re-

pealed.

Szo. 22 (EmMercency CLause).—Whereas an em-

ergency exists this act shall be of full force and

effect from and after its passage and approval.

Approved February 2, 1903.

Supreme Court of the United States.

THE CITY OF OMAHA,

VS. No. 159.

THE OMAHA WATER COMPANY.

OCTOBER TERM 1909.

BRIEF FOR CITY OF OMAHA.

STATEMENT OF THE CASE.

This case is a suit in equity by Omaha Water Com-

pany vs. The City of Omaha to require the city to

accept a deed of conveyance of the entire system of

water works of the Omaha Water Company in Omaha,

South Omaha, East Omaha, Dundee and Florence, and

pay to the Company therefor the sum of $6,263,295.49;

said sum of money being the amount of an appraisement

the city insists is invalid and void.

The principal reasons why the city insists that the

said appraisement is invalid and void are:

First. That the contract under which the appraise-

ment was made required that the same should be con-

curred in by the three appraisers, whereas, the valuation

made was concurred in by two of the appraisers and dis-

sented from by the third appraiser.

2

Second. That there was misconduct on the part of

the board in this: The board of appraisers held open

sessions from July 20, 1903, to December 31, 1904, receiv-

ing and hearing as a judicial body, evidence tendered by

the respective parties; and more than one year after the

taking of evidence had been closed and the case argued

by the attorneys and submitted, the said appraisers se-

cretly and against the protest of the City of Omaha, re-

ceived ex parte evidence tendered by Omaha Water Com-

pany and which the city was not given an opportunity to

examine or to rebut.

Third. That said appraisers, without authority un-

der the contract or warrant in law, included in the award

a large sum of money for ‘‘going value.”’

Fourth. That said appraisers, without authority,

and without warrant in law, included in said award the

value of those parts of the water plant lying outside the

City of Omaha and being within the limits of South Oma-

ha, East Omaha, Dundee and Florence, and used for the

supplying of the said last named municipalities with

water and not necessary or incidental to the supplying of

water to the City of Omaha.

In 1880 the City of Omaha passed ordinances author-

izing a contract for the construction of water works for

supplying the City of Omaha with water for fire protec-

tion and public and domestic use. (rec. pp. 680-686.)

Ordinance No. 423, which became a part of ‘the contract,

contained the following, (rec. p. 686) :

**Sec. 14. The city of Omaha shall have the right

at any time after the expiration of twenty years

to purchase the said water works at an appraised

valuation, which shall be ascertained by the esti-

mate of three engineers, one to be selected by the

city council, one by the water works company,

and these two to select the third; Provided that

3

nothing shall be paid for the unexpired franchise

of said company.”’

Pursuant to said section the City of Omaha, by an

ordinance approved March 2, 1903, (rec. pp. 159-160)

elected to purchase the water works ‘‘as authorized and

provided by section 14’’ of ordinance No. 423, quoted

supra. The city of Omaha appointed John W. Alvord

an appraiser, the Water Company appointed G. H. Ben-

zenberg an appraiser and the two selected Daniel W.

Mead the third appraiser. The three appraisers met

in the city of Omaha July 20, 1903, and organized as a

board by electing Daniel W. Mead chairman and John W.

Alvord secretary (rec. p. 161) and began taking testi-

mony in open session. (rec. p. 133.) The city of Oma-

ha appeared by its attorney, Mr. Carl C. Wright, and

the Water Company appeared by its attorneys, Mr. James

M. Woolworth, Mr. Howard Mansfield and Mr. R. 8S. Hall.

Said attorneys produced. and orally examined under oath

a large number of witnesses. The typewritten report of

the evidence so taken covered about 2,000 peges (rec. p.

161) and filled five volumes. (rec. p. 142.)

In addition to the above the parties submitted many

hundreds of plans and blue prints and several hundred

pages of inventory. (rec. p. 161.) This manner of

taking evidence was continued by the board from time

to time until December 31, 1904, (about a year and one-

half), when the matters were argued orally and by print-

ed briefs before the board of appraisers by the attorneys

for the respective parties. At this date the board ad-

journed and took the valuation under advisement. (rec.

pp. 133, 161, 491.)

Subsequently, in Feb., 1906, (a year and two months

after the submission), the Water Company secretly and

without the knowledge of the city of Omaha (then and,

4

there well knowing that the city of Omaha would protest

against the clandestine presentation of ex parte evidence)

shipped its books of account, covering a period of ten

years of its business, from Omaha, Neb., to Cincinnati,

Ohio, and there presented the same to the board of ap-

praisers for their investigation and consideration, cou-

pled with an understanding between the Water Company

and the appraisers that the appraisers would secretly

receive the said evidence and would refuse to disclose

the nature, force or effect of the said evidence. (rec. pp.

170, 93, 94, 95, 107.)

The city was not permitted to see the said books, al-

though it demanded an opportunity to do so (rec. pp.

107, 170), and the city has never been advised of the

content

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