OMAHA V. OMAHA WATER CO., 218 U. S. 180 (1910)

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U.S. Supreme Court

Omaha v. Omaha Water Co., 218 U.S. 180 (1910)

Omaha v. Omaha Water Company

No. 159

Argued April 19, 1910

Decided May 31, 1910

218 U.S. 180


In the absence of any provision in the submission, the award of arbitrators or appraisers must be unanimous in matters of private concern, but a majority can act when the matter submitted is one which concerns the public.

The fact that public affairs are controlled by majorities is probably the basis of the above rule, although the reason for the distinction therein contained is not altogether clear.

Page 218 U. S. 181

The purchase by a municipality, under authority and direction of the legislature of the state, of a water supply system, and the determination of the price to be paid for an existing plant are matters of public concern.

There is a distinction between an arbitration and an appraisal of value, and although arbitrators may not independently take testimony as to disputed facts, appraisers may, as in this case, properly examine books and papers relating to the property, in the absence of counsel, without being guilty of misconduct; and, in the absence of bad faith, such examination will not vitiate the award.

The legislature of a state may authorize a municipality to purchase a water system which extends beyond the city limits and to supply water to adjacent sections, and so held that the City of Omaha has such right, and that an appraisal of a water system is not bad, and hence not binding on the city, because it includes the entire system, parts of which are beyond the city limits.

There is a presumption against an intent to dismember a complete waterworks system, and an ordinance to purchase such a system will not be construed as requiring such dismemberment, even if the city had no power to use certain portions of the system.

Cost of duplication, less depreciation, of a water system, is less than the commercial value of the system as a going concern, and, even though the value of the unexpired franchise be expressly excluded from the appraisal, where the parties contemplate the purchase of a complete water system in operation, a reasonable amount should be included in the appraisal for the "going value" over the value of the physical properties.

A transaction of great magnitude such as the purchase by a city of a water supply system will not be defeated because of minor obstacles, and if the deed tendered includes a few properties to which title is not perfect or if there are incumbrances on the properties, the court can bring the proper parties in and the deed can be modified and interests protected so as to carry out, and not defeat, the transaction.

The facts are stated in the opinion.

Page 218 U. S. 191

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