City of Pocatello v. Murray

• Decision Date: 18 January 1912
• Citation: 120 P. 812,21 Idaho 180
• Parties: CITY OF POCATELLO, Plaintiff, v. JAMES A. MURRAY, Defendant
• Court: Idaho Supreme Court

120 P. 812

21 Idaho 180

CITY OF POCATELLO, Plaintiff, v. JAMES A. MURRAY, Defendant

Supreme Court of Idaho

January 18, 1912

RES ADJUDICATA-CONSTITUTIONAL LAW-LEGISLATIVE AUTHORITY TO PRESCRIBE MANNER OF FIXING WATER RATES-SALE OF WATER A PUBLIC USE-MUNICIPAL AUTHORITY TO CONTRACT FOR WATER SUPPLY - MUNICIPAL AUTHORITY TO PRESCRIBE METHOD OF FIXING RATES-CONTRACT SUBJECT TO CONSTITUTIONAL PROVISIONS-IMPAIRMENT OF OBLIGATION OF CONTRACT-TAKING PROPERTY WITHOUT DUE PROCESS OF LAW-PLEA OF ANOTHER ACTION PENDING.

(Syllabus by the court.)

1. Where a bill was filed in the circuit court of the United States by a municipal corporation against M., who was maintaining and operating a waterworks system within the municipality, praying that the court "fix and promulgate reasonable rates and charges for water to be furnished by the defendant under his franchise to the plaintiff and its inhabitants.... and that the defendant be restrained and enjoined from making, fixing or promulgating any other rate or rates" greater than or different from those fixed by the court, and the court after hearing the case argued on demurrer to the petition entered an order and judgment sustaining the demurrer and dismissing the bill on the ground that the court was "without jurisdiction to fix and promulgate the water rates and charges which defendant shall have the right to collect," and thereafter the municipality filed its complaint in the state court, setting forth that the water rates charged by the defendant are unreasonable and unjust and that it has appointed commissioners in conformity with the provisions of sec. 2839 Rev. Codes, and that the defendant has neglected and refused to appoint like commissioners in conformity with the provisions of the statute and prays that the court issue a writ, commanding and compelling the defendant to appoint commissioners in conformity with the statute (sec. 2839, Rev. Codes), held: That a plea that the judgment of the United States circuit court in dismissing the bill filed in that court is a bar to the prosecution and maintenance of the subsequent action in the state court, is not well taken and does not state facts sufficient to constitute an estoppel.

2. Where a case was dismissed and disposed of on the ground that the court had no jurisdiction to hear and determine the matter involved, such court was without jurisdiction to determine or pass upon any question raised by the pleadings except the question alone of the court's jurisdiction and any further finding or holding by the court with reference to the matters pleaded is not binding in a subsequent action between the same parties and cannot become res adjudicata.

3. Under the provisions of secs. 1 and 2 of art. 15 of the state constitution, the use of all waters within this state which are sold, rented or distributed for a beneficial use is declared to be a public use, and subject to the regulation and control of the state in the manner prescribed by law, and the right to collect rates or compensation for water supplied to any county, city, town or water district or the inhabitants thereof is a franchise and cannot be exercised except by authority of and in the manner prescribed by law.

4. Sec 6, art. 15, of the constitution ordains that "The legislature shall provide by law the manner in which reasonable maximum rates may be established to be charged for the use of water sold, rented or distributed for any useful or beneficial purpose."

5. After the adoption of secs. 1, 2, and 6 of art. 15 of the state constitution, it was in excess of and beyond the power of any city, town or village within this state, by ordinance contract or otherwise, to bind itself or the inhabitants thereof to pay fixed rates or charges for water sold, rented or distributed for any longer or greater period of time than that intervening between the time of the passage of such ordinance and making of such contract and the subsequent fixing of rates under the enactment by the legislature of a statute prescribing the manner and method in which reasonable maximum rates might be established. Such an ordinance or contract would, on the other hand, be binding and enforceable until such time as the legislature, complying with the provisions of sec. 6, art. 15, enacted a statute prescribing the manner of fixing such rates and rates are established in conformity therewith.

6. Ordinance No. 86 of the city of Pocatello, adopted on June 1 1901, which prescribed a schedule of rates which the Pocatello Water Co. might charge for supplying water to the inhabitants of the city of Pocatello for a fixed period of time and which also provided the method and manner of thereafter appointing a commission to establish rates at the expiration of such period, must be read and construed in the light of the provisions of the constitution (secs. 1, 2, and 6 of art. 15), and was subject to the operation of the constitution and the power of the legislature to prescribe the manner in which reasonable maximum rates might thereafter be established to be charged for the use of water sold, rented or distributed for any useful or beneficial purpose.

7. The appointment of commissioners under the provisions of sec. 2839, Rev. Codes, which was enacted subsequent to the adoption of ordinance No. 86 of the city of Pocatello, does not impair the obligation of a contract previously executed, and is therefore not in violation of sec. 10, art. 1, of the constitution of the United States, nor does it have the effect of taking defendant's property without due process of law in violation of sec. 1 of the fourteenth amendment to the federal constitution.

8. Sec. 6, art. 15, of the state constitution, guarantees to everyone engaged in supplying water under a sale or rental that the rates to be established shall always be "reasonable maximum rates," and that as a consequence thereof the property of one so engaged shall not be taken without due process of law.

9. No one has a vested right to charge an unreasonable or unconscionable rate to consumers while exercising a franchise to serve a public use; and to deprive a person engaged in such a public service of the power to charge and collect an unreasonable, extortionate or unconscionable rate, deprives him of no right, natural or acquired, and cannot be the impairment of a contract within the purview and meaning of the federal constitution, nor does it amount to depriving him of property without due process of law.

10. The fact that sec. 2839 of the Rev. Codes, which provides for the appointment of a commission for the purpose of fixing rates to be charged water consumers, requires that such commissioners shall be "taxpayers of the city," does not render the statute obnoxious to either the state or federal constitution on the ground that it does not provide an impartial and unprejudiced tribunal.

11. The plea of another action pending examined, considered, and held insufficient as a plea in abatement.

Original action by the city of Pocatello, praying a writ of mandate. Demurrer and answer by the defendant, and demurrer by the plaintiff to defendant's answer. Demurrer to the complaint overruled; demurrer to the answer sustained. Peremptory writ issued.

Demurrer to the complaint overruled, and demurrer to the answer sustained. Writ issued. Costs awarded to plaintiff.

P. C. O'Malley, Clark & Budge, and Richards & Haga, for Plaintiff.

When property is devoted to a public use, it is subject to public regulation. (Munn v. Illinois, 94 U.S. 113, 24 L.Ed. 77.)

"This power of regulation is a power of government continuing in its nature, and if it can be bargained away at all, it can only be by words of positive grant or something which is in law equivalent." (Railroad Commission Cases, 116 U.S. 325, 6 S.Ct. 334, 388, 1191, 20 L.Ed. 636; Budd v. New York, 143 U.S. 517, 12 S.Ct. 468, 36 L.Ed. 247; Rogers Park Water Co. v. Fergus, 180 U.S. 624, 21 S.Ct. 490, 45 L.Ed. 702.)

Grants of immunity from legitimate governmental control are never to be presumed. (Ruggles v. Illinois, 108 U.S. 526, 2 S.Ct. 832, 27 L.Ed. 812.)

Specific authority for that purpose is required. (Home Tel. & Tel. Co. v. City of Los Angeles, 211 U.S. 265, 29 S.Ct. 50, 53 L.Ed. 176; Louisville & Nashville R. Co. v. Mottley, 219 U.S. 467, 31 S.Ct. 265, 55 L.Ed. 297.)

Contracts must be understood as made in reference to the possible exercise of the rightful authority of the government, and no obligation of a contract can extend to the defeat of legitimate government authority. (Addyston Pipe & Steel Co. v. United States, 175 U.S. 211, 229, 20 S.Ct. 96, 44 L.Ed. 136; Legal Tender Cases, 12 Wall. (U.S.) 550, 20 L.Ed. 311; Fitzgerald v. Grand Trunk Co., 63 Vt. 169, 22 A. 76, 13 L. R. A. 70.)

"Until the legislature provides the method for fixing rates, the contract between the parties will govern." (Jack v. Village of Grangeville, 9 Idaho 291, 74 P. 969.)

Rates may be established from time to time as the legislature may by law provide. (Zanesville v. Zanesville Gas Light Co., 47 Ohio 1, 23 N.E. 55.)

In the case at bar defendant took his franchise under a constitutional provision which commanded the legislature to provide by law the manner in which reasonable maximum rates may be established (sec. 6, art. 15), and the contract was made subject to the possibility of its exercise as it was expressed by the subsequent statute. (Tampa Waterworks Co. v. Tampa, 199 U.S. 241, 26 S.Ct. 23, 50 L.Ed. 170, and cases cited.)

Although a city is given power to contract for a water supply, the legislature may subsequently supply a manner of readjusting or fixing rates. (City of Danville v. Danville Water Co., 178 Ill. 299, 69 Am. St. 304, 53 N.E. 118, 180 Ill 235, 54 N.E. 224, 186 Ill. 326, 57 N.E. 1129, ...