SEWERAGE AND WATER BOARD OF NEW ORLEANS v. HOWARD, 175 F. 555

FOSTER, District Judge. This was a bill in equity, filed by Frank T. Howard, receiver of the New Orleans Waterworks Company, against the Sewerage and Water Board of New Orleans, substantially alleging: That complainant operated a water distribution system to which were connected some 12,000 premises in the city of New Orleans up to March 1, 1909, when same was turned over to respondent under the terms of a contract, and it was thereafter operated hy respondent.

That, in violation of the said contract, respondent adopted a resolution, through its board of directors, on March 11, 1909, limiting the time for pumping water into complainant’s mains to 30, 60, and 90 days for certain areas, and for the balance to December 31, 1909, and issued and published a general notice to the public, reciting the adoption of said resolution, and urging and warning consumers connected with and taking water from complainant’s pipes to make connections with respondent’s new pipes, requiring them to make application to respondent, and to make a deposit to cover cost of connections.

That, as the statute of Louisiana creating the Sewerage and Water Board, known as Act No. 6, p. 16, of 1899, required respondent to make connections with its own mains, to the edge of the property line, at its own cost, respondent had no right, under the terms of said contract, to cut off and to refuse to supply water to those connected with the distributive system o.f complainant until such time as it had actually made the new connections.

The bill further alleges that complainant is entitled to receive two-thirds of the gross revenues which respondent ought to collect from the consumers connected with his mains during the life of said contract, which will amount to more than $75,000 if respondent shall faithfully keep and perform all its obligations under the contract, but that complainant will suffer a loss of at least 50 per cent, of-said amount if respondent is riot restrained from doing the said acts complained of.

The bill also alleges two specific violations of the contract by refusal to furnish water to intending consumers connected with complainant’s pipes, but not actually taking water at the time the contract was entered into. Copies of the resolution and notice complained of and the contract are annexed to the bill.

The bill then prays an injunction, commanding respondent to desist and refrain from refusing to furnish water to any person whose premises were connected with complainant’s mains on December 26, 1908, and who still remain connected and desire to take water from said mains until it shall have first made connections with its own pipes, and is ready to furnish water, and that said respondent be further enjoined from carrying into effect its resolution of March 11, 1909.

On this bill a rule nisi issued, and respondent made written return thereto, and also, at the same time, filed a demurrer to the bill, both return and demurrer setting up substantially the same defenses, to wit, that the bill did not state a cause of action; that, if complainant was erititled to any relief in the premises, his remedy was at law, and not in equity; that said contract was ultra vires; and, if not void.ab initio for want of authority in respondent to make it, was invalid because not ratified by the New Orleans common council.

The demurrer does not appear to have been formally disposed of, but the cause was heard by the Circuit Court on the bill and exhibits and return to the rule nisi, and thereupon an injunction issued, as follows : “It is therefore ordered, adjudged and decreed that a writ of injunction issue herein commanding the sewerage and water board of New Orleans, defendant, and all persons claiming to act under its authority, direction, or control, to absolutely desist and refrain from refusing to furnish water to any person or persons, corporations, or firms whose premises were connected with the mains and pipes of the late New Orleans Waterworks Company on the 26th day of December, 1908, and still remain so connected, ami who desire to take and pay for water from said mains and pipes upon the same terms that said hoard supplies water from its pipes to its consumers under its tariff of December 10, 1908. until said board shall have made connection with its own pipes and is ready to furnish water, and from carrying into effect its resolution of March 11, 1909, in -which it declares its intention to cease supplying water to all consumers connected with the mains and pipes of the late New Orleans Waterworks Company on the 81st day of December, 1909, unless by that time ihov have made connections with the system of said Sewerage and Water Hoard, and that defendant remain so enjoined until it shall have made connection with its own pipes, and until there shall remain no consumers connected with the ¡lipes of the said late New Orleans Waterworks Company, who desire to take and ¡iay for water under said tariff, and from refusing to furnish water to any person connected with the mains and ¡lipes of the said late New Orleans Waterworks Company on (he 26ih day of December, 1908, in the low pressure areas or districts referred to in defendant's resolution of March 11, 1909, who may desire to take and pay for water therefrom under said tariff of December 10, 1908. until defendant shall have made connections with its own mains and pipes and is ready to supply water therefrom.

And it is furl her ordered that the defendant and all those claiming to act under its authority and in its behalf remain so enjoined until further order of this Court.-’ It is manifest from the allegations and prayer of the bill that, while an injunction is prayed, the specific performance of the contract is sought, and the injunction, in effect, grants such relief. It is also evident the contract is continuing and uncertain as to termination.

Apparently respondent is without funds to make the connections between its own mains and the premises connected with complainant’s system, and it is not shown when respondent will have such funds, or that it will ever have' them. On the theory of the bill, which seems to have been adopted by the Circuit Court in issuing the injunction, the contract should be kept alive and respondent required to pump water into complainant’s mains as long as a single consumer remains connected with complainant’s system, and unconnected with respondent’s mains.

The specific violations of the contract set out by the bill are the refusals to supply water to persons connected with respondent's mains, but not actually consumers at the time the contract was entered into. Clearly the specific enforcement of the contract would require the retention of the bill and supervision of the contract indefinitely. Furthermore, the bill alleges that complainant will be damaged in a definite sum by the anticipated violation of the contract, and it does not allege the insolvency of respondent, or suggest that, for any reason, damages could not be collected.

It is evident that in this case the court cannot make a decree ending the controversy, and, if performance be decreed, the case must remain in court for a long and indeterminate period. It is further contended on behalf of complainant that the cause involves an accounting and that the rates collected by respondent constitute a special fund, and also that, as the bill is ancillary to the receivership proceedings, equity has jurisdiction at all events. None of these contentions seems to us to be well founded.

The proving of damages may be tedious, but is a matter of mere calculation, which the jury can very well do. All the facts as to the number of consumers connected with the complainant’s mains, the rates, and other necessary-data are within his knowledge, and require no discovery or accounting by respondent. If the contract be violated, as contemplated, there would be no fund created. Nor would the fact that the receiver had elected to proceed by ancillary bill of itself give jurisdiction in equity. We are of opinion that complainant is not entitled to relief in equity. See Texas & Pacific R. R. v.

Marshall, 136 U. S. 395, 10 Sup. Ct. 846, 34 L. Ed. 385; Marble Co. v. Ripley, 10 Wall. 339, 19 L. Ed. 955. These views render it unnecessary to pass upon the other questions raised on the appeal, and, in conformity with them, the judgment of the Circuit Court will be reversed, the injunction set aside, and the cause remanded, with instructions to dismiss the bill.