Village of Waverly v. Waverly Water Co.

Waverly Water Company for the privilege of examining its books, relative to the sizes and times of laying its mains, the amount of its gross income, the expenses and other information concerning the' value- .of such property, and such, examination has been refused; that plaintiff has offered the defendant the Waverly Water Company the sum of $105,000 for such property, which offer has. been ignored, and- said defendant has refused and néglected to enter into, negotiations with the plaintiff for the purchase of said property.

Upon such allegations the defendant relies upon this appeal, mainly .upon two preliminary objections: . .

First. That there is no sufficient allegation of inability upon the part- o.f the board of trustees of the village- of Waverly to agree upon a price.

■ Secondly. That the resolution adopted by the taxpayers of the village :was insufficient to authorize the condemnation of. this property, inasmuch as it failed to provide for raising annually by tax a sum sufficient, to pay the interest and principal .of the,bonds as the same should become due. - . ,

As to the first objection, it is provided in section 3360 of the " Gode of Civil Procedure that the petition in a condemnation proceeding shall show that the plaintiff has been unable to agree with the owner of the property for its purchase, and the reason of such inability. By section 222 of the Village Law it is provided: “ If a proposition be adopted for the acquisition of an existing system of water works, the board of, water commissioners may purchase the same at a price not exceeding the sum specified therein; If the board can not agree with the owners of the system for its purchase, proceedings may he taken to acquire the.same by. condemnation. * * By subdivision 19 of section 88 of the Village Law the board. of trustees of a village are required to exercise all the functions of a' board of waiter commissioners, if there be no board of water commissioners appointed,' It is strenuously insisted that the only effort on the part of the board of trustees to endeavor to agree with the water company upon a price was in the resolution which required that the property should be sold by the water- company free and clear of all liens and liabilities, which was known to be an impossibility by the board of trustees' when the resolution was passed. The water company had issued bonds to the amount óf $70,000, which were

secured by a mortgage upon the property. These bonds were naturally distributed among many holders, who might demand premiums upon their bonds. It is insisted, therefore, that the proposition submitted was an impracticable one, and was, therefore, not issued in good faith. If this were the only effort upon the part of the board of trustees, defendant’s contention would be well founded. But by the petition it appears that no answer was made by the Waverly Water Company to this proposition, and no attempt on its part to come to any agreement. It further appears that the village of Waverly has at least upon two occasions requested them to make an offer, which they have neglected and refused to make; has requested permission to examine their books to ascertain the extent of their property, and finally that the said water company has refused and neglected to enter ifito negotiations with the plaintiff for the purchase of said property. It is contended that this endeavor to agree must be made by the board of trustees of the village, and that an allegation of an endeavor on the part of the village is not sufficient. In the Condemnation Law, howevér, the provision is that the plaintiff must make the endeavor to agree, and as the village can only act through its board of trustees, it seems clear to me that when the two statutes are read together there is a sufficient allegation of an endeavor and inability to agree. The fruitlessness of such an eiideavor could hardly be more strongly alleged than in the allegation of a refusal on the part of the defendant company to enter into negotiations therefor.

Defendants’ second contention presents greater difficulty. Section 5 of the General Municipal Law (Laws of 1892, chap. 685) reads as follows: u A funded debt shall not be contracted by a municipal corporation except for a specific object expressly. stated in the ordinance or resolution proposing it; nor unless such ordinance' or resolution shall be passed by a two-third vote of all the members elected to the board or council adopting it, or submitted to and approved by the electors of the town or county, or taxpayers of the village or city when required by law. Such ordinance or resolution shall provide for raising annually by tax a sum sufficient to pay the interest and the principal as the same shall become due” This resolution adopted by the taxpayers of the village did not provide for the raising annually by tax of a sum suffi

cient to pay the interest and principal as the same should become due. The learned judge at Special Term has held that no funded debt is contracted by authority of this resolution, and that this provision, therefore, of the General Municipal Law was inapplicable. Without passing upon this question, we think the section is inapplicable for another reason. Such a provision as is contemplated by the section for the annual contribution to the payment of a funded debt can only be made for a debt that is in' itself certain and definite. • It cannot be known until the final outcome either of the negotiation or of the condemnation proceedings what amount is required to be raised, and whether it will he necessary to create any funded debt whatever for the purpose, or, if so, the nature of the payments that should be made thereon. In our opinion, therefore, this provision was not intended to apply to a proposition submitted for this purpose, the extent of the liability therefor being wholly incapable of ascertainment at the time of the passage of the resolution.

We have examined the other objections raised to the plaintiff’s petition, and agree with the Special Term that they should he' overruled. The order must, therefore, he affirmed.

All concurred, except Sewell, J., dissenting.

Order affirmed, with ten dollars costs and disbursements.