Show VICTORY FOR THE CIT Thomas D Dee Appointed Receiver For the Ogden Waterworks JUDGE ROLAPPS DECISION WATERWORKS STILL BELONG TO THE CITY TH CTY Action of the Council In Transferring Transfer-ring the System Is Null and Void Judge Dee Furnishes a Bond In the Sum of 50000 and Takes Possession Judge Rolapp yesterday afternoon of appointed Thomas D Dee receiver the Ogden waterworks granting the petition of the plaintiff in the suit of the city against the Bear River Irrigation Irriga-tion and Ogden Waterworks company The decision was handed down yesterday yester-day morning but the appointment of the receiver was deferred until later In the day Property interests of two and a half millions are involved in this litigation and the case is of direct tIllllil z t I 3 k mM t i THOMAS D DEE interest to every dweller in the city c while the water rights and land interests inter-ests involved give i general importance import-ance The olnion of Judge Rolapp i of I great lengthas the court enters into an extensive review of the history of I the case setting forth the contentions of each side and the grounds upon I which their claims are based Coming down to the receivership proceedings the court says I MATTER IN CONTROVERSY The subject matter in this controversy contro-versy is the waterworks system and I water used insupplying thecitizens of Ogden with water together with the I rents produced therefrom The system sys-tem without the water or the water without the system is of comparatively I little value the one would simply amount to pipes buried in I the ground I and the other would be unavailable for Us interded uses and absolutely useless use-less during the greater portion of the j year The two combined produce property 1 prop-erty which is valuaole not only on account of the necessity for its exist i erce in that form but aIm by reason I of the rentals received therefrom The I question therefore is Whether that r property so produced or the fund created cre-ated thereby is in danger of being lost removed or materially injured It is true that the water and jeU water system j j sys-tem as such could not be physically i removed lost or materially injured yet that is not the only sense in which the language used is applied I the benefits bene-fits to result from the plaintiffs recovery recov-ery in this action will be either wholly 1 lost or substantially impaired during the pendency of this action then the court wil if it is a proper case appoint ap-point a receiver pendenteflite In this case it fairly appears that the defendant corporation having possession pos-session I of the property is insolvent ct ht6 enitn I The fact that the nonresident defendants defend-ants are not insolvent does not change I bl J nA l rr hp the matter because it clearly appears from the complaint that no personal Judgment can be taken against them i there being no allegations that they have taken the rentals claimed to be rentas due the city The insolvency of the I corporation In question coupled with the fact that none of the rents and profits except a comparatively small sum are now in the hands of the corporation cor-poration but have been converted into I property upon which there is a len i largely In excess of Its value upon j which lien no interest has been paid r for years and therefore may be foreclosed I fore-closed Pt any time and when so foreclosed fore-closed would not only consume the specific j spe-cific property upon which the len exists ex-ists but also all other property held by the corporation demonstrates that not only the rentals already collected but also the rentals to be collected during I J the pendency of this action are in great V j materially danger of impaired either being wholly lost or f i RIGHTS OF BONDHOLDERS I is useless to say that because the present stockholders are also its bndhohler that therefore no foreclosure fore-closure can take place because the un matured bonds are negotiable instru ments which can readily be sold for value and such purchasers would have aue a perfect right t foreclose on all the I property legally covered by the trust deed and secure judgment against the I I corporation for any deficiency and thus consume the entire property In fact in view of the evidence disclosed on this hearing any bondholder not also a stockholder would at his very time be entUled to the appointment of a receiver for all the property of the defendant de-fendant corporation In view of the pleadings and evidence in this case the contingency here suggested would seem the most likely course to be pursued pur-sued and then the beneficial effect resulting re-sulting to the plaintiff from the recovery en of a judgment would be practically lost I the city is entitled to the rentals rent-als resulting from the use of the water supplied to Ogden City at all it is entitled to them from Oct 27 1890 and in withholding a receiver the court would compel the plaintiff to still further fur-ther permit the illegal appropriations by the defendants of the funds belongIng belong-Ing to the cit The risk of injury tote to-te respective parties is always taken into consideration by the court in appointing ap-pointing a receiver and while In this case the plaintiff would sustain serious injury i after a judgment the rentals J rent-als should have been lost the injury to the defendant would simply amount I to the loss of the Immediate use of the net profits resulting from the operation of the waterworks I must therefore S flndrthat there is danger of the property injured prop-erty and fund being lost or materially injuredTHE THE CITYS INTEREST The second question is Whether t e plaintiffs Interest in the property I or fund o th proceeds thereof i I f9 probable Upon that question there would seem under the pleadings and evidence adduced to be very little S doubt That waterworks belonging to a city are property of a public nature and held for public uses and that such property when once acquired by a city cannot be sold leased or in any manner man-ner alienated without special legislative legisla-tive authority is too well established to be longer a matter of controversy After citing a number of authorities the court continued hI follows therefore that inasmuch a the water system owned by Ogden City was held In trust by the city tviuii cil for public purposes the city council coun-cil was incapable of selling giving away turning over t 1 otherwise transferring trans-ferring the same and the defendants and their predecessors in interest knowing and being by law charged with the duty of knowing that it was trust property and obtaining the same in violation of said trust is an involuntary invol-untary trustee for said property for the benefit of Ogden City The city council thus not having any authority to abrogate its governmental powers and functions it follows that the the contract entered Into between mayor and Bothwell and also the resolution olution turning over the waterworks to the defendant company were void ab initio Besides under its charter the city could not grant such rights or property by a mere resolution the provisions visions being that the city council shall have the power to authorize the construction and maintenance of waterworks water-works and to pass ordinances carrying such powers into effect Comp laws see 1755 Concerning the claim of the defendant defend-ant that the present system Is not the same system used formerly by Ogden City the court says I is very likely that the city ha so conducted itself that upon the final hearing in this case the court will compel com-pel it to reimburse the defendant company com-pany for property which by the joint acts of the defendants and the officers of the city has been permitted to be placed as a betterment upon the citys public property but that does not concern con-cern us upon this hearing If any portions por-tions of the property placed around or about the property of the city not absolutely ab-solutely necessary for the purpose of carrying out the purposes for which i has been dedicated and has been used can be distinguished and separated sepa-rated from the remainder and the city has no interest in such property then of course a receiver would not take possession of such property But upor the other hand where a wrongdoer has knowingly so conducted himself that to permit him t6 remove his own property prop-erty would materially injure or absolutely I abso-lutely destroy the property of another not himself at fault then a court of equity will not permit a separation of such property but will endeavor to do justice in some other way RECEIVERSHIP ORDERED As I view the facts in this case giving the denials in the answer their full merit the admitted and proven facts show that the interest of the I I plaintiff in the property set out in the I complaint is more than probable Those I facts are That the property turned over to the defendant company was the property of the city that the defendant defend-ant company accepted such property under a resolution of the city council that they now use at least part of that property that the substance of that property consisted and still consists of the combination of water and a waterworks water-works system that the defendant company com-pany has now connected inseparably for the purposes for which I was constructed con-structed uid Is used part of the property prop-erty turned over to it by the city with part of the property belonging to the defendant that the defendant company has collected and still intends to collect col-lect all the rentals resulting from such combined property Under such a state of facts the law says that property thus acquired by a city is public property which cannot by any act of the city council be alienated from the public much less by a simple resolution of its chosen officers when the statute specifically provides another method and that if the defendant being 1 be-ing a knowing party to the violation of f I f law mixes property of another who is froter ir thcen I incompetent to contract concerning such property with his own property Iso Iso I-so that the uses and purposes of its I construction would be destroyed and the wants and necessities uf the public be imperiled by a separation of such I i properties then the law will not permit i the defendant to hold such specific property I in addition to all that I i I by reason of the insolvency of such wrongdoer there is grave doubt j whether the rentals that have been and i i will be illegally collected by the defendant I I defend-ant can ever be collected then a very strops case Is shown for the intervention I interven-tion of a court of equity in the appointment appoint-ment of a receiver S I am therefore of the opinion that a receiver should be appointed to take charge of the property set out in the I complaint and the rentals derived or to be derived therefrom also such books k and other personal property in the I I possession of the defendant as have 1 heretofore been used In the operation I of such waterworks J i Let the order be prepared i I JUDGE DEE APPOINTED I At 5 oclock yesterday afternoon the i defendants came into court and asked I I that they be permitted to give a bond in the sum of 50000 and continue in I possession of the waterworks Their I petition was supported by affidavits to the effect that they could furnish a good and sufficient bond and said that they had not anticipated the appointment appoint-ment of a receiver They argued that as the original system according to the pleadings was worth not to exceed ex-ceed 100000 and the present system accorins to the city engineers report re-port was wOrth 267000 they had an Interest of at least 167000 and that the ctys interest would be fully protected pro-tected by the bond Their application was denied and the court signed the decree The attorneys for the respective sides were unable to agree upon anyone any-one satisfactory to both sides as receiver re-ceiver and the court thereupon appointed ap-pointed Thomas D Dee fixing his bonds at 50000 He immediately quali fed with David Eccles and H H Henderson as his bondsmen The keys of the office were turned over to him by Mr Rowe and he took formal possession All of the money that has been collected since the first of the year on water rents will also be turned over to the receiver a the rents are collected in advance All of the waterworks employees are to meet at the companys office at 9 oclock this morning when they will receive their discharge from the company com-pany and do business thereafter with the receiver |