909.

607

peal. From this finding it appears that in April, 1873, Hutton made his prom. issory note to Edward Ivinson for $13,582.54, with interest, and that on the same day he executed the mortgage which is the foundation of this foreclosure suit to secure the payment of the note. Subsequent to this, Ivinson asserted that a mistake had been made in computing the balance due him in the settlement on which the note and mortgage were given, and that they should have been for $17,618.66, instead of the sum actually put in the mortgage and note, making a difference of $4,036.12. Ivinson brought a suit to correct this mistake, which finally came to the supreme court of the United States, where he prevailed, obtaining a decree for the correction of the mistake in the note and mortgage. These proceedings lasted from August, 1873, to March, 1879.

Pending this controversy, however, Ivinson and Hutton made a written agreement to adjust their differences, other than this controversy, but it was expressly agreed that the controversy, then pending in this court, was left out of the settlement, by the following language: "Provided always, that nothing herein contained shall be construed in anywise to affect the rights of the parties hereto in said suit between them now depending in the supreme court of the United States."

This agreement was made on the thirty-first of May, 1877, and is marked "Exhibit D" in the record before us. On the sixth day of October, 1877, Ivinson, Hutton, and Joseph M. Carey were at the court-house in Laramie City, for the purpose of concluding a loan of $10,000, which Carey was about to make on behalf of himself and brother to Hutton, to enable him to pay his debts, including a judgment in favor of Creighton against Ivinson and Hutton, amounting to nearly $6,000. This loan was to be secured by real estate, part of which was covered by Ivinson's mortgage. Before paying over the money to Hutton, Carey required of Ivinson and Hutton that Hutton's property should be released from all incumbrances, and Ivinson entered on the margin of the record of his mortgage the discharge which we have already transcribed. The court then further finds as follows:

"That said discharge was not made in accordance or in pursuance of the agreement of the thirty-first of May, A. D. 1877, above recited, marked Exhibit D,' but was an absolute, unqualified release and cancellation of the mortgage. The court further finds that the value of the property mortgaged was not less than twenty thousand dollars.

"(4) On the trial of the case in the district court the testimony of eight witnesses, to-wit, Edward Ivinson, M. C. Brown, J. M. Carey, Charles H. Hutton, Stephen W. Downey, Walter Sinclair, H. B. Rumsey, and J. W. Blake, which had been taken before J. W. Meldrum, master in chancery, was read in evidence. To so much of said evidence as was intended to vary, explain, or contradict or qualify the entry of the discharge on the margin of the record of the mortgage by Ivinson the defendant excepted as incompetent. This court holds that said exception was well taken, and that parol evidence was not competent for that purpose, or to prove that the discharge was made in accordance with Exhibit D.

"(5) But the court further holds that if said parol testimony was properly admitted for said purpose, that it is not sufficient; that it does not prove any qualification or modification of the discharge as entered on the record, nor that said discharge was made in accordance with the agreement of the thirtyfirst of May, marked Exhibit D.'

"(6) This court makes no finding upon the question whether the $4,036.12 was paid by Hutton at the time of the discharge of the mortgage, or at any other time, holding the decision of that question unnecessary to the determination of this suit."

On these findings the bill of complaint of Ivinson was dismissed. The conveyances of the property in controversy, which were made by Hutton to

the Careys, are absolute deeds on their face, and both the Careys and Hutton insisted in their answer that the note and mortgage were absolutely dis charged and satisfied according to the terms of the indorsement made by Ivinson on the record of the mortgage. This is also the finding of the supreme court of the territory. The argument used in opposition to this is that the supreme court and the court below erred in rejecting the evidence mentioned in the fourth finding of fact, and it is insisted that because of the error in this respect the entire decree should be reversed. But, in point of fact, this testimony was read in evidence in the lower court, notwithstanding the objection of the plaintiff, and was considered for what it may possibly be worth also in the supreme court; for that court, in its fifth finding, says that if said testimony was properly admitted for the purpose claimed, that it is not sufficient, and does not prove any qualification or modification of the discharge as entered on the record, nor that said discharge was made subject to the agreement of the thirty-first of May, marked "Exhibit D." It will be seen that the controversy mainly hinged upon the question whether the discharge on the margin of the record of the mortgage made by Ivinson was made subject to this written agreement with Hutton, namely, that the controversy concerning the $4,036.12 involved in the suit then pending in the United States supreme court was excepted out of the adjustment of their differences, evidenced by Exhibit D, and that this question should be governed by the

final decision of that suit.

On this issue the court distinctly finds that said discharge was not made in accordance with or in pursuance of that agreement, but was an absolute and unqualified release and cancellation of the mortgage, and that, if said, parol testimony was properly admitted, it does not prove that the discharge .was made in accordance with the agreement above referred to. It is therefore entirely immaterial whether the supreme court was right in holding that the exception to the parol evidence taken in the court below was error, since it further holds that, giving full effect to that evidence, it does not prove anything to impeach the force and effect of the language of the discharge and release of the mortgage and note.

We do not think that on the finding of facts made by the supreme court, that there is any doubt of the correctness of its final decree, and it is therefore affirmed.

(120 U. S. 64)

ST. TAMMANY WATER-WORKS Co. and another . NEW ORLEANS WATERWORKS Co.1

(January 10, 1887.)

1. CONSTITUTIONAL LAW-IMPAIRING OBLIGATION OF CONTRACTS-EXCLUSIVE FRANCHISE -WATER COMPANY.

The grant to the New Orleans Water-works Company, by Louisiana act of March 31, 1877, of the exclusive privilege to use the streets of New Orleans to lay waterpipes in, and thus supply the city with water, is within the legislative power, and is a contract, the obligation of which cannot be impaired by the state. The state constitution of 1879 abolishing the monopoly features in charters of then existing corporations is therefore inoperative as regards it, and a corporation thereafter or ganized under the general incorporation law will be enjoined at its suit from interfering with its exclusive franchise.

2. SAME-HOW EXCLUSIVE RIGHTS LOST.

Although the franchise thus granted is subject to the police power of the state, and to the right of the state, or the municipality acting under legislative authority, to require a sufficient supply of water of good quality, yet the competing company cannot justify its action by simply showing that it will supply purer and more suitable water than the New Orleans Water-works Company; neither the legislature nor the city having taken any steps in the matter.

'Affirming 14 Fed. Rep. 194.

Appeal from the Circuit Court of the United States for the Eastern District of Louisiana.

Suit for an injunction. Decree for complainant below. Defendant appeals.

G. L. Hall, for appellants, St. Tammany Water-works Co. and another. E. H. Farrar and J. R. Beckwith, for appellee, New Orleans Water-works Co.

99

HARLAN, J. The parties to this appeal are corporations of the state of Louisiana. The New Orleans Water-works Company was created by a special act of the general assembly of Louisiana, passed March 31, 1877, and was given the exclusive right, for 50 years from the date of its charter, "of supplying the city of New Orleans and its inhabitants with water from the Mississippi river, or any other stream or river, by means of pipes and conduits, and for erecting and constructing any necessary works or engines or machines for that purpose. It was vested with authority to construct canals and trenches for conducting "the water of the rivers from any place or places it may deem fit, and to raise and construct such dykes, mounds, and reservoirs as may be required for securing and carrying a full supply of pure water to said city and its inhabitants," and "to lay and place any number of conduits or pipes or aqueducts * * * through or over any of the streets of the city of New Orleans." It was required to proceed, immediately after its organization, in the "erection of new works and pipes sufficient in capacity to furnish a full and adequate supply of water, to be drawn from the Mississippi river or elsewhere, as may be judged most expedient."

In New Orleans Water-works Co. v. Rivers, 115 U. S. 681, S. C. 6 Sup. Ct. Rep. 273, which involved the validity of a municipal ordinance granting to one Rivers the privilege of bringing water from the Mississippi river into his hotel, in the city of New Orleans, by means of mains and pipes laid in its streets, it was adjudged that so much of the company's charter as gave it the exclusive privilege before mentioned was, within the meaning of the constitution of the United States, a contract protected against impairment, in respect of its obligation, by that provision of the state constitution of 1879 abolishing the monopoly features in the charters of all then existing corporations other than railroad corporations. Consequently that ordinance was void as interfering with the contract rights of the company.

It was also decided that "the right to dig up and use the streets and alleys of New Orleans for the purpose of placing mains and pipes for supplying the city and its inhabitants with water is a franchise belonging to the state, which she could grant to persons or corporations upon such terms as she deemed best for the public interests;" and since "the object to be attained was a public one, for which the state could make provision by legislative enactment, the granting the franchise could be accompanied with such exclusive privileges to the grantee, in respect of the subject of the grant, as in the judgment of the legislative department would best promote the public health and the public comfort, or the protection of public and private property." But it was. also decided that, notwithstanding the exclusive privileges granted to the company, "the power remains with the state, or with the municipal government of New Orleans acting under legislative authority, to make such regulations as will secure to the public the uninterrupted use of the streets, as well as prevent the distribution of water unfit for use, and provide for such a continuous supply, in quantity, as protection to property, public and private, may require;" and that rights and privileges arising from contracts with the state are “subject to regulations for the protection of the public health, the public morals, and the public safety, in the same sense as are all contracts and all property, whether owned by natural persons or corporations."

The St. Tammany Water-works Company was organized in 1882, under thegeneral laws of Louisiana relating to corporations. Its articles of association

declare the object of its incorporation to be "to furnish and supply the inhabitants of the city of New Orleans and other localities contiguous to the line of its works with an ample supply of pure, clear, and wholesome water from such rivers, streams, or other fountain sources as may be found most available for such purpose," and to that end to lay pipes and conduits, and construct and maintain such system of water-works as may be required for the purposes of its organization.

This company being about to take active steps to obtain authority for bringing into New Orleans the waters of the Bogue Falaya river, in the parish of St. Tammany, and distributing the same by means of pipes, mains, and conduits placed in the streets of that city parallel with those constructed by the New Orleans Water-works Company, the present suit was brought by the latter corporation for the purpose of obtaining an injunction against all attempts by the appellant, its agents and employes, to infringe upon the exclusive privileges granted to the appellee. The answer admits the material facts alleged in the bill, but insists that the charter of the appellee, so far as it granted the exclusive privileges in question, could be set aside, repealed, or abolished by the state, or by the legislature, or by the municipal government of New Orleans, in the exercise of police functions. The controlling question is as to the effect of the before-mentioned provision of the state constitution upon the exclusive rights granted to the plaintiff by its charter.

As the exclusive right of the appellee to supply the city of New Orleans. and its inhabitants with water was not restricted to water drawn from the Mississippi river, but embraced water from any other stream, it is impossible to distinguish this case in principle from that of New Orleans Waterworks Co. v. Rivers. Upon the authority of the latter case, it must be held that the carrying out by appellant of its scheme for a system of water-works in New Orleans would be in violation of the rights of the appellee, and that the state constitution of 1879, so far as it assumes to withdraw the exclusive privileges granted to the appellee, is inconsistent with the clause of the national constitution forbidding a state from passing any law impairing the obligation of contracts.

It is, however, contended, in behalf of the St. Tammany Water-works Company, that the water from the Bogue Falaya river is shown by the proof to be pure, uncontaminated by saline or organic matters to any appreciable extent, and to be more suitable for drinking, washing, cooking, manufacturing, and other purposes, than the water drawn from the Mississippi river, and distributed through the city by the New Orleans Water-works Company: and upon these facts is based the suggestion that the people of New Orleans cannot be prevented, by the contract the appellee has with the state, from obtaining, through any lawful agency, such water as is most beneficial to their health, or best adapted for business or public uses. Touching this and similar suggestions by counsel of the appellant, it is sufficient to say that no question arises in the present case as to whether the state or the municipal government of New Orleans may not, if the public health or the public comfort so require, compel the appellee, now having the exclusive right of supplying the city of New Orleans and its inhabitants with water distributed through pipes laid in the streets of that municipality, (or if it refuses, employ other agencies,) to supply water from some river or stream other than the Mississippi. No such action has been had either by the state or by the city, and consequently there was no substantial dispute between the plaintiff and the city. The latter has not given its assent to the use by the St. Tammany Water works Company of the public streets for the distribution of water by means of pipes laid in them, nor has it, so far as the record shows, determined that the public health would be better protected, or the public comfort subserved, by supplying the people with water from the Bogue Falaya river rather than from the Mississippi river. These are matters which

neither the appellant nor individual citizens may determine for the constituted authorities. In what mode such questions may be determined, so as to be binding upon the appellee, need not be considered until they actually arise in proper form.

The legal effect of the decree is only to prevent the St. Tammany Waterworks Company, under any power it now has, from laying pipes, mains, and conduits in and through the streets of New Orleans, for supplying that city and its inhabitants with water. It is therefore, upon the authority of the former case, affirmed.

(120 U. S. 73)

FORSYTH, impleaded, etc., v. DOOLITTLE and others.

(January 17, 1887.)

1. EVIDENCE-ADMISSIONS-Joint DEFENDANTS-ONLY ONE SERVED-PLEADING. Under the statute of Illinois providing that, in actions on contract against two or more defendants jointly, proof of joint liability shall not be required to entitle plaintiff to judgment unless it is denied by plea veriled by affidavit, the acts or statements of one of two defendants thus declared against is admissible against the other, if the pleadings do not contain the denial required by statute, although only the latter defendant is served with process.

2. SAME-BROKER'S SERVICES-CHARACTER OF LAND.

In an action to recover for services rendered in effecting the sale of land located near a large city, evidence as to the character of the land and its possible value as a future suburb of the city, is admissible.

3. WITNESS-HYPOTHETICAL QUESTIONS-Length.

The length of hypothetical statements to be allowed to be made to a witness should be left, in a great measure, to the discretion of the trial judge; and if the latter carefully explains to the jury the character of the statements, and instructs them that the value of questions based upon them depends upon whether the statements are sustained by proof, and it does not appear that the witness or the jur; were confused or misled by them, they will not be held objectionable.

In Error to the Circuit Court of the United States for the Northern District of Illinois.

Action on contract. Judgment for plaintiffs below. Defendant appeals. J. E. McDonald and John M. Butler, for plaintiff in error. M. W. Fuller, Jas. R. Doolittle, and Jas. R. Doolittle, Jr., for defendants in error.

зue.

FIELD, J. This is an action to recover compensation for services rendered by the plaintiffs below to the defendants in effecting a sale of certain lands in Indiana, and in various legal proceedings concerning the title, or claims against them. The declaration alleges a joint contract and liability by the defendants below, Caroline Forsyth and Jacob Forsyth, her husband; but the summons was served on her only. She appeared, and pleaded the general is A statute of Illinois provides that in actions on contracts, express or implied, against two or more defendants as partners, joint obligors, or payors, proof of their joint liability or partnership shall not be required to entitle the plaintiff to judgment, unless such proof shall be rendered necessary by a plea in abatement, or a plea in bar, denying the partnership or joint liability, verified by affidavit. The joint contract and liability of the defendants, therefore, stood admitted by the pleadings, and this is a sufficient answer to several objections taken to the admissibility of statements and the proof of acts of the defendant, Jacob Forsyth. Being jointly liable with Caroline on the contract in suit, his declarations respecting the services rendered under it were as admissible as if made by her.

The services for which compensation is sought were not only those required of attorneys and counselors at law, but were also those of negotiators seeking to accomplish the result desired by consultation with proposed purchasers, and presentation to them of the advantages to be derived from the property, present and prospective. Varied as were the legal services of the