City of Mobile v. Bienville Water Supply Co.

• Citation: 130 Ala. 379,30 So. 445
• Parties: CITY OF MOBILE ET AL. v. BIENVILLE WATER SUPPLY CO.
• Decision Date: 11 June 1901
• Court: Supreme Court of Alabama

30 So. 445

130 Ala. 379

CITY OF MOBILE ET AL. v. BIENVILLE WATER SUPPLY CO.

Supreme Court of Alabama

June 11, 1901

Appeal from chancery court, Mobile county; Thomas H. Smith Chancellor.

Bill by the Bienville Water Supply Company against the city of Mobile and others. Demurrers to the bill were overruled, and defendants appeal. Affirmed.

The bill was filed on May 25, 1900. Upon the demurrers interposed thereto being sustained, the bill was amended on October 6 1900.

As amended, the bill seeks to prohibit the city from discriminating against the Bienville Water Company and its water consumers in the rates of charges for the sewers which belong to the city, and to prohibit the city from charging the water consumers of the Bienville water for the use of the city sewers any more, or a higher rate than is charged by the city to its own water consumers for the use of its sewers and also to restrain the city from charging the same price for the use of both its water and sewers as it does for its water alone; and further to enjoin the city of Mobile from charging to or collecting from the Bienville Water Company and its water consumers any sum whatever until it has by ordinance established and fixed a rate of charges for the tapping and use of its sewers. The averments of the bill are sufficiently stated in the opinion.

The prayer of the bill as amended was in words and figures as follows: "That your honor will prohibit the defendants their officers, agents and employés from discriminating against orator and its customers and water consumers in rates of charges for the use of the city sewers, and that your honor will restrain and prohibit the defendants, their officers, agents and employés from charging orator's customers and water consumers for the use of the city's sewer or sewerage system any more than they charge the customers and water consumers of the city's water for such sewer service alone, and restrain the city from charging the same price for the use of its sewers and sewerage system as it does for the use of both its sewers and water together, and that your honor will prohibit and enjoin the city of Mobile, its officers, agents and employeés from charging to, or collecting from your orator or its customers and consumers of water any sum or sums whatever until it has by law or ordinance established and fixed a rate of charges for the tapping and use of the city's sewers and sewerage system, and that your honor will grant to your orator such other and further or other and different relief as the nature of its case may require and as in equity and good conscience it ought to have."

To the bill as amended there were nine grounds of demurrer interposed. Demurrers 1, 2, 3, 4 and 5 raise the question that the city by reason of its not having passed an ordinance to that effect, has no legal authority to charge for the tapping and use of its sewers, and that all persons are charged with this knowledge of the law, and hence that such acts as are charged in the bill are void, and that the city cannot be made or held liable therefor. Demurrer 6 raises objection to the bill because it does not allege that the complaint has been charged anything for using the sewers and hence it does not show that the city has committed any breach of duty to it. Demurrers 7, 8 and 9 raise the objection to the bill that the acts and doings charged were in violation of the rights of citizens and consumers, but that no such acts are charged as violating any rights of the complainant; and that, therefore, complainant cannot maintain the present bill.

On the submission of the cause upon the demurrers, the chancellor rendered a decree overruling them.

B. B. Boone, for appellants.

Bestor, Gray & Bestor and R. H. Clarke, for appellee.

HARALSON J.

1. It cannot be pretended, that in granting a charter to the complainant company in 1883, the legislature conferred on that company any exclusive privilege for supplying the city of Mobile and its inhabitants with water. All rights not exclusively granted to the complainant, were reserved, and the rights thus reserved included the granting of a franchise to another corporation to carry on the same business in the same territory. While the effect of granting such a franchise, afterwards, to the city, might be to impair and possibly by fair competition to ultimately largely destroy the value of complainant's plant, it would not be in excess of legislative power to grant the franchise to the city, nor would it in anywise infringe the federal constitution, prohibiting a state legislature from passing laws impairing its obligations. If there is no contract, there is nothing in the grant on which the constitution could act. The element of a contract by the state with the complainant company, did not enter into the grant of its franchise to establish and operate a system of waterworks in Mobile. Stone v. Mississippi, 101 U.S. 814, 25 L.Ed. 1079; Skaneateles Waterworks Co. v. Village of Skaneateles, 161 N.Y. 154, 55 N.E. 562, 46 L. R. A. 687; Charles River Bridge v. Warren Bridge, 11 Pet. 420, 9 L.Ed. 773; State v. City of Hamilton, 47 Ohio St. 52, 23 N.E. 935; Scranton Electric Light & Heat Co.'s Appeal, 122 Pa. 154, 15 A. 446; 2 Beach, Priv. Corp. §§ 22, 27.

2. The right of the legislature to fix rates, which the courts cannot exercise, seems to be well understood. But in the absence of legislative regulations, it is competent for the courts to interfere to protect the public against unreasonable charges and discriminations. Reagan v. Farmers' Loan & Trust Co., 154 U.S. 362, 398, 14 S.Ct. 1047, 38 L.Ed. 1014; Waterworks v. Schottler, 110 U.S. 347, 4 S.Ct. 48, 28 L.Ed. 173; Munn v. Illinois, 94 U.S. 113, 24 L.Ed. 77.

Mr. Beach, touching this question observes: "The franchise of laying pipes through city streets and selling water to the inhabitants thereof, being in the nature of a public use, or natural monopoly, carries with it the duty to supply water to all impartially and at reasonable rates; *** and an injunction may be issued to prevent it from cutting off its water supply, when the customer has offered to pay in advance the proper amount for the use of the water during the year, and the company claims a higher rate than is usually due and exigible." 2 Beach, Mun. Corp. 834 (c).

In 29 Am. & Eng. Law (1st Ed.) p. 19, it is said: "The acceptance by a water company of its franchises, carries with it the duty of supplying all persons along the lines of its mains, without discrimination, with the commodity which it was organized to furnish. All persons are entitled to have the same service on equal terms and on uniform rates."

The principle announced is reasonable and necessary. Without it the business interests and domestic comfort of the community, so far as dependent on supplies such companies furnish, would be at their mercy, and make them masters in this regard, of the cities they were established to serve. As said by the supreme court of North Carolina: "A few wealthy men might combine and by threatening to establish competition, procure...