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

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## Record

- **Collection:** Supreme Court brief
- **Document type:** Petition for Writ of Certiorari
- **Published:** January 1, 1910
- **Citation:** 218 U.S. 180

## Text

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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

10

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.

a ae

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.

zy ae AAAS.

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 gal

[Text truncated at 120,000 characters. The full text is on the page linked above.]

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Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40386001_0143%3A2. Public record. Not legal advice.