THE VILLAGE IN A HOLE.

New York, 1895

THE WATER COMPANY MUST HAVE ITS CONTRACT EXTENDED.

Unless the Village Trustees Exercise Their Option and Buy the Company's Plant — An Important Opinion on the Subject by Counselor Monfort.

The contract between the village of Jamaica and the water company will expire September 7th, 1897, and in view of this the trustees have already discussed the question of the village thereafter owning and operating a water plant of its own. THE FARMER, at the time the discussion was going on, expressed the opinion that the terms of the present contract between the village and the water company would prevent the village from becoming a dealer in water unless the trustees purchased the plant of the company.

The question thus raised was submitted to Counselor Monfort by direction of the trustees, and he holds the same view as THE FARMER, viz: that before the village can engage in the business of supplying water it must purchase the company's plant, and, failing to do that the company is entitled to a renewal of its contract for five years, or until 1902, on the present terms. The opinion of Mr. Monfort is as follows:

To the Board of Trustees of the Village of Jamaica:
On the 23rd day of April, 1887, the Jamaica Water Supply company entered into a contract with the village of Jamaica, whereby it agreed to supply the latter with water for a term of five years from said date. At the expiration of the said five years the contract provided that the same should be renewed, at the option of the village, for another period of similar duration, and that at the expiration of the second term of five years the village should have the option of purchasing the system of water works and the appurtenances; but that in default of said purchase, said contract should be renewed for a third term of five years.

On the 7th day of September, 1892, some five mouths after the expiration of the first term stipulated for in the said contract, the company entered into a second contract with the village for supplying water to the latter from the date last mentioned until the 23rd day of April, 1897.

This latter agreement is not expressly stated to be a renewal of the first and its terms and conditions are somewhat different from those contained in the latter, but it is made to expire at the expiration of the second term of five years from the date of the original agreement and it is undoubtedly to be considered as it renewal of that contract.

The question now arises whether the water company, at the expiration of this second contract and in default of the village exercising its right to purchase, is entitled, under the original agreement, to a further renewal of its contract for a third term of five years.

Such further renewal is expressly, as has been stated, provided for in the original agreement and the company has in no way apparently forfeited or waived its right to the performance of this provision, and I am, therefore, of opinion that it may insist upon such renewal under the circumstances stated.

And such would seem to have been the view of the electors who voted for the making of the original contract with the company, for it is provided in paragraph thirteen of the specifications contained in the resolution passed at the meeting of such electors, held on the 22nd day of March, 1887, that "at the expiration of ten years after the contract" with the company is made, if the village shall not elect to purchase the works, "then the term of the contract shall be extended for five years upon the same terms, privileges and rents as for the first ten years." The company has, in my opinion, an absolute right to this third renewal unless the village, at the expiration of the current contract, exercises its option to purchase.

Dated Jamaica, N. Y., June 18th, 1895.
HENRY A. MONFORT.

It is probable that the water company will ask $150,000 for its plant. It is said that the company has expended over $100,000. If the village and the company cannot agree, the question may be referred to arbitrators.

—The Long Island Farmer, Jamaica, NY, June 28, 1895, p. 1.