Long Islandco v. City of Brooklyn, WATER-SUPPLY

• Citation: 166 U.S. 685,41 L.Ed. 1165,17 S.Ct. 718
• Decision Date: 26 April 1897
• Docket Number: WATER-SUPPLY,No. 216,216
• Parties: LONG ISLANDCO. v. CITY OF BROOKLYN
• Court: United States Supreme Court

166 U.S. 685

17 S.Ct. 718

41 L.Ed. 1165

LONG ISLAND WATER-SUPPLY CO.

v CITY OF BROOKLYN.

No. 216.

April 26, 1897.

Under authority of chapter 737 of the Laws of New York for 1873 (Laws N. Y. 1873, p. 1100), as amended in 1881 (Laws N. Y. 1881, p. 443, c. 321), the plaintiff in error was organized as a water company. On September 15, 1881, it entered into a contract with the town of New Lots, by which it agreed to lay water pipes and mains in the streets of New Lots, and supply the town with water. The town, on the other hand, agreed to pay for hydrants to be furnished and supplied, as provided in the contract, at a specified rate per hydrant, the number of hydrants to be not less than 200. The term of the contract was 25 years. This contract was modified on July 2, 1885, but the modification contains nothing material to this controversy.

In 1886, by chapter 335 (Laws N. Y. 1886, p. 540), the town of New Lots was annexed to and merged in the city of Brooklyn, to be known thereafter as the Twenty-Sixth ward of said city.

The fourth section of this act provided, among other things, that 'the amount annually payable by said town for water supplied to it under existing contracts between it and the Long Island Water-Supply Company, shall, after this act takes effect, during the terms of said contract, or until said city shall purchase or acquire the property of said water company, as in the next section provided, be levied and collected from the property situated and taxable within the territory hereby annexed, and such amount shall be paid to the said water company by said city as it falls due from time to time under said contracts, and the said city of Brooklyn shall not distribute or furnish water for consumption of use within said territory, or lay any pipes or mains for the distribution or supply of water within said territory, until the expiration of the charter of said company, or until the said city shall purchase or acquire the property of said company, as in the next section provided.'

By section 5 the city was given power to purchase or condemn the property of the company within two years, but did neither. In 1892 the legislature passed another act (Laws 1892, p. 960, c. 481), authorizing the city of Brooklyn to condemn the property of the company, the first section of which is as follows:

'Section 1. The public interest requires the acquisition, by the city of Brooklyn, for the public use of the reservoir, wells, machinery, pipes, franchises and all other property of the Long Island Water Supply Company, and the said city of Brooklyn is hereby authorized to acquire the same for such use by condemnation, free of all liens and incumbrances whatsoever, provided that the proceedings herein, hereinafter and hereby authorized shall be commenced within one year after the passage of this act.'

Subsequent sections prescribed the procedure. Proceedings were had under this act. The commissioners appointed, as provided therein, valued the property of the company at $570,000, of which $370,000 was named as the value of the tangible property, and $200,000 that of the franchises, contracts, and all other rights and property, of whatsoever nature or kind, of the company, including therein the contract between the town of New Lots and the company. The special term of the supreme court, on June 29, 1893, made an order vacating and setting aside this report, and appointing new commissioners. The city of Brooklyn appealed to the general term of that court, which, on December 1, 1893, reversed the order of the special term and confirmed the report of the com- missioners. The company then took an appeal to the court of appeals. That court affirmed the decision of the general term (143 N. Y. 596, 38 N. E. 983), and remitted the record to the supreme court, which court, on December 4, 1894, entered final judgment in favor of the city of Brooklyn, and thereupon this writ of error was sued out.

John F. Dillon and B. F. Tracy, for plaintiff in error.

A. G. McDonald and George G. Reynolds, for defendant in error.

Mr. Justice BREWER, after stating the facts in the foregoing language, delivered the opinion of the court.

So far as respects any mere matter of procedure, or of conflict between the statute authorizing the condemnation or the proceedings had thereunder and the constitution of the state, the decision of the court of appeals is conclusive. Bridge Co. v. Dix, 6 How. 507; Bucher v. Railroad Co., 125 U. S. 555, 8 Sup. Ct. 974; Adams Exp. Co. v. Ohio, 165 U. S. 194, 17 Sup. Ct. 305. Our inquiry must be directed to the question whether any rights of the water-supply company secured by the constitution of the United States have been violated. The contention of plaintiff in error is that the proceedings had under the statute which resulted in the judgment of condemnation violate section 10, art. 1, of the constitution of the United States, which forbids any state to pass a law impairing the obligation of contracts, and were not 'due process of law,' as required by the fourteenth amendment.

With reference to the first part of this contention, it is said that in 1881 the town of New Lots made a contract with the water-supply company by which for each and every year during the term of 25 years it covenanted to pay to the company so much per hydrant for hydrants furnished and supplied by it; that the act of annexation continued the burden of this obligation upon the territory within the limits of the town, although thereafter the town, as a separate municipality, ceased to exist, and the territory became simply a ward of the city of Brooklyn; that the condemnation proceedings destroyed this contract, and released the territory from any obligation to pay the stipulated hybrant rental; that a state or municipality cannot do indirectly what it cannot to directly; that, as the municipality could not, by any direct act, release itself from any of the obligations of its contract, it could not accomplish the same result by proceedings in condemnation. We cannot yield our assent to this contention. All private property is held subject to the demands of a public use. The constitutional guaranty of just compensation is not a limitation of the power to take, but only a condition of its exercise. Whenever public uses require, the government may appropriate any private property on the payment of just compensation. That the supply of water to a city is a public purpose cannot be doubted, and hence the condemnation of a water-supply system must be recognized as within the unquestioned limits of the power of eminent domain. It matters not to whom the water-supply system belongs, individual or corporation, or what franchises are connected with it; all may be taken for public uses upon payment of just compensation. It is not disputed by counsel that, were there no contract between the company and the town, the waterworks might be taken by condemnation. And so the contention is, practically, that the existence of the contract withdraws the property, during the life of the contract, from the scope of the power of eminent domain, because taking the tangible property will prevent the company from supplying water, and therefore operate to relieve the town from the payment of hydrant rentals. In other words, the prohibition against a law impairing the obligation of contracts stays the power of eminent domain in respect to property which otherwise could be taken by it. Such a decision would be far-reaching in its effects. There is probably no water company in the land which has not some subsisting contract with a municipality which it supplies, and within which its works are located and ruling that all those properties are beyond the reach of the power of eminent domain during the existence of those contracts is one which, to say the least, would require careful consideration before receiving judicial sanction. The fact that this particular contract is for the payment of money for hydrant rental is not vital. Every contract is equally within the protecting reach of the prohibitory clause of the constitution. The charter of a corporation is a contract, and its obligations cannot be impaired. So it would seem to follow, if plaintiff in error's contention is sound, that the franchises of a corporation could not be taken by condemnation, because thereby the contract created by the charter is impaired. The privileges granted to the corporation are taken away, and the obligation of the corporation to perform is also destroyed.

The vice of this argument is twofold: First. It ignores the fact that the contract is a mere incident to the tangible property; that it is the latter which, being fitted for public uses, is condemned. And while the company, by being deprived of its tangible property, is unable to perform its part of the contract, and therefore can make no demands upon the town for performance on its part, it still is true that the contract is not the thing which is sought to be condemned, and its impairment, if impairment there be, is a mere consequence of the appropriation of the tangible property. Second. A contract is property, and, like any other property, may be taken under condemnation proceedings for public use. New Orleans Gas Co. v. Louisiana Light & Heat Producing & Manuf'g Co., 115 U. S. 650, 673, 6 Sup. Ct. 252. Its condemnation is, of course, subject to the rule of just compensation, and that is all that is implied in the decisions such as Hall v. Wisconsin, 103 U. S. 5, cited by counsel. In that case it appeared that Hall had a contract with the state for services entered into in pursuance of a statute, that he performed the services, but that before finishing his work the legislature repealed the statute authorizing the contract. It was held that he was nevertheless entitled to his stipulated compensation. The act of the legislature in the repeal was not one providing for condemnation, and, in so far as it partook of the ...