This is a bill by the trustee under a mortgage made by the Columbus Water Works Company upon its plant and franchise to secure an issue of bonds, to enjoin the municipal authorities of Columbus, Georgia, from constructing and operating a municipal water system, thereby impairing the obligation of a contract between the city and the waterworks company, granting to the latter for a term of thirty years an exclusive right to maintain a waterworks system in the streets of the city.
The bill, in substance, avers, and the answer admits, that the city has procured from the legislature of Georgia authority to construct and operate a municipal water plant, and to issue the bonds of the city for that purpose, and that, in pursuance of this legislative authority, ordinances have been passed providing for the construction of such waterworks, and for the issuance of bonds to provide the means, and that notice of that purpose, and that the city no longer regards the contract with the Columbus Water Works Company as binding or obligatory, has been given.
The material defenses are, first, that the city had no power to make an exclusive contract; second, that the contract for rental of hydrants created an aggregate indebtedness prohibited by the Constitution of the state; and, third, that the waterworks company had not kept its contract in respect of the character or capacity of the plant it was to provide and maintain, and has failed in its obligation to furnish an abundant and constant supply of pure and wholesome water, thus compelling the municipality to construct a system of its own for the protection of the health and property of its inhabitants.
These defenses were relied upon in the answer of the city as a defense against the injunction sought by the complainant, and were made the subject of a cross bill against the complainant and the waterworks company, praying relief against the contract as having been first broken by the company.
Prior to the filing of this bill, the same complainant had filed its original bill in the same court against the Columbus Water Works Company, praying a foreclosure of its mortgage, a default having occurred. The bill referred to was filed December 22, 1902. The present bill was not filed until July 30, 1903. One of the allegations of the foreclosure bill was 'that during the continuance of this deed in trust, the said party of the first part will not do or suffer to be done any act or acts whereby the security of the said bondholders shall be in any way or manner or in any amount impaired, and that the said party of the first part will at all times preserve, maintain, and keep its waterworks, pumps, machinery, reservoirs, piping, hydrants, and equipments in good repair, working order, and condition, and supplied with all the machinery, equipments, and appliances for providing water to the city of Columbus and vicinity, and shall and will, from time to time, make all needful and proper repairs, renewals, and replacements, and useful and proper alterations, additions, betterments, and improvements.
'3. That your orator is informed that for more than six months last past the Columbus Water Works Company has suffered the security of the bondholders to become impaired by not maintaining and keeping its water works supplied with all the machinery, equipments, and appliances for providing water to the city of Columbus and vicinity, and by not making useful and proper additions, betterments, and improvements to said waterworks. Further explaining the foregoing allegation, your orator states that, owing to an unprecedented and protracted drought, the sources of supply of water for the said waterworks have to a large extent failed for the time being; that it is within the power of the said waterworks company to provide for such a contingency by seeking and availing itself of other sources of supply, but that, as your orator is informed, owing to the attitude of the City of Columbus, which now is taking steps to provide a water supply of its own, the Columbus Water Works Company is unable to sell its bonds reserved in its treasury for such purposes, and which could have been sold except for the attitude of the said city, and therefore is unable to carry out the betterments and improvements in its water supply above mentioned.'