Phillips Village Corp. v. Phillips Water Co. , 104 Me. 103 ( 1908 )

Strout, J.

Plaintiff was incorporated by the legislature by chapter 490, Special Laws of 1885, amended by chapter 141, Special Laws of 1887. Being a creature of statute, it had only such powers as were conferred by statute expressly or by necessary implication. By section 2 of chapter 490, Special Laws, 1885, as amended by chapter 141, Special Laws, 1887, it was empowered to raise money to provide water for the extinguishment of fires, provide hydrants, etc., and for no other purpose. Under this grant of power, it might contract with a water company to supply water for' such purpose. It did this by a contract with defendant company, incorporated by chapter 170, Special Laws of 1891, which authorized defendant to contract with plaintiff for supply of water. By article 10 of that contract, the parties provided that after the expiration of ten years the plaintiff should "have the right to purchase the (defendant) company’s entire works,” at an appraised value to be fixed by three appraisers chosen one by plaintiff and one by defendant, and the third by these two, and on payment of the price so determined, the defendant should transfer to plaintiff by proper conveyance its entire plant.

The plaintiffs have selected an appraiser, and asked defendant to select one, which it has failed to do, and this bill is brought for specific performance, to compel the defendant to select one appraiser, as provided for in article 10. To this the defendant says that article 10 was ultra vires, and is not binding. Prior to the act of 1905, Special Laws, c. 162, no authority had been conferred upon plaintiff to purchase defendant’s plant, or to raise money to pay for it. The agreement consequently was ultra vires, and without force. The act of 1905 authorized plaintiff "at any legal meeting called for that purpose” to "vote to purchase the entire works and rights of the Phillips Water company for such sum of money as may be adjudged payable according to the terms of article ten of the contract entered into between said Phillips Village Corporation and said Phillips Water Company, or in accordance with the terms of any other contract hereinafter entered into by the same parties,” and the pláintiff was authorized by the act to raise money for the payment of the price, and for future extension by assessment or by issuing bonds.

Prior to this act, we find no authority given to plaintiff to purchase the works or to raise money to pay for them.

This authority given by the act of 1905 may have a retrospective operation and make valid article ten of the contract, theretofore invalid. But when the Village Corporation attempts to avail itself of the granted power, it must proceed according to the terms of the act. That contemplated a single vote of the Village Corporation to purchase the water works "for such sum of money as may be adjudged payable,” etc. This language clearly implies that the vote shall precede the appraisal. It cannot be construed to authorize an appraisal in the first instance, and leave to the Village Corporation the option then to buy or not. Fair dealing, as well as the reading of the statute, requires that before an appraisal is had, there should be an obligation to purchase on the one hand and to sell on the other, in which case an appraisal would be useful and binding. There is no reason why the Water Company should be subjected to the expense, trouble and exposure of its business attendant upon an appraisal, when there is no obligation of the Village Corporation to buy, and perhaps no intention to do so. It must be borne in mind that prior to the enabling act, the Village Corporation had no authority to purchase or require ap appraisal.

No vote of the Village Corporation to purchase has ever been passed. On the contrary, at two meetings of the corporation in the warrants for which was an article to see if the corporation would vote to purchase the water plant, it was voted to pass over the articles,— thus refusing to commit the corporation to the purchase.-

The plaintiffs are not entitled to an appraisal, until it shall vote to purchase, as provided in the act. In Farmington v. Water Co., 93 Maine, 192, there was a valid contract between the parties, and the case turned upon the construction of that contract. Here there was no valid contract between the Village Corporation and the Water Company until the Village Corporation voted to purchase, as authorized by the act of 1905. Such vote was necessary to make any contract between the parties. Kennebec Water District v. Waterville, 96 Maine, 234, cited by plaintiff, has no application to this case, and the same is true of Mayo v. Village Fire Co., 96 Maine, 541. In Fittery Water District v. Agamenticus Water Co., 103 Maine, 25, the statute authorizing the purchase of the water plant provided that if the parties did not agree upon the price, the Water District might apply to a Justice of this court for the appointment of appraisers. That case does not apply to the question in this.

The entry must be,

Bill dismissed with costs.