City of Trenton v. State of New Jersey

Decision Date07 May 1923
Docket NumberNo. 430,430
Citation67 L.Ed. 937,262 U.S. 182,43 S.Ct. 534
CourtU.S. Supreme Court

Mr. A. V. Dawes, of Trenton, N. J., for plaintiff in error.

Mr. William Newcorn, of Plainfield, N. J., for the State of New Jersey.

Mr. Justice BUTLER delivered the opinion of the Court.

The state of New Jersey recovered judgment against the city of Trenton for $14,310, in an action brought in the state Supreme Court. The judgment was affirmed by the Court of Errors and Appeals, and is here on writ of error.

The state's right to recover depends upon the validity of an act of the Legislature (chapter 252, Laws of 1907). The city asserts that this act offends against the contract clause of the Constitution of the United States, and that it takes property owned by the city in its private or proprietary capacity for public use without just compensation and without due process of law, in violation of the Fourteenth Amendment. The act provides that:

'Every municipality, corporation or private person now diverting the waters of streams or lakes with outlets for the purpose of a public water supply shall make annual payments on the first day of May to the state treasurer for all such water hereafter diverted in excess of the amount now being legally diverted: Provided, however, no payment shall be required until such legal diversion shall exceed a total amount equal to one hundred (100) gallons daily per capita for each inhabitant of the municipality or municipalities supplied, as shown by the census of one thousand nine hundred and five.' Section 8.

The city claims the right to take from the Delaware river all the water that it requires, without limitation as to quantity and without license fee for any part thereof, and that such right was acquired by the president and directors of the Trenton Waterworks (hereinafter called the water company) by grant direct from the state March 24, 1852, and that the city acquired this right by purchase from the water company. Briefly, the basis of the city's claim is as follows:

By an act of February 29, 1804, the president and directors of the Trenton Waterworks were created a body politic and corporate. They and their successors and assigns were made capable of disposing of water to such as might apply for the same for such annual rent and under such restrictions as they might think proper, and they were authorized to lay and extend their water mains through the streets of the city. Certain springs constituted the company's source of supply, and by reason of increase of population ceased to be adequate. March 24, 1852 (P. L. p. 289), a supplement to the above-mentioned act was passed, by which the company was authorized to take the water required either in whole or in part from the Delaware river. Later, March 2, 1855 (P. L. p. 141), an act was passed, authorizing the city to purchase the whole or a majority of the shares of the capital stock of the water company, and the city purchased all of the stock. Thereafter an act of March 1, 1859 (P. L. p. 38), required the company to convey unto 'the inhabitants of the city of Trenton' all the real estate, works and property and all the corporate powers, franchises and privileges of the company, and this conveyance was duly made.

If the provision of the act of 1907 imposing the license fee is valid as against the city, the judgment is right. The Court of Errors and Appeals held that it was valid, that the state under its police power might impose a license fee as specified in the act, and that this does not deprive the city of any contractual or property right.

The stat undoubtedly has power, and it is its duty, to control and conserve the use of its water resources for the benefit of all its inhabitants, and the act of 1907 was passed pursuant to the policy of the state to prevent waste and to economize its water resources. Decision of the Court of Errors and Appeals in this case, 117 Atl. 158; McCarter v. Hudson Water Co., 70 N. J. Eq. 695, 701, 702, 14 L. R. A. (N. S.) 197, 118 Am. St. Rep. 754, 10 Ann. Cas. 116, £affirmed by this court in 209 U. S. 349, 355, 28 Sup. Ct. 529, 52 L. Ed. 828, 14 Ann. Cas. 560; Collingswood v. Water-Supply Commission, 84 N. J. Law, 104, 110, 86 Atl. 660; Cobb v. Davenport, 32 N. J. Law, 369, 378. The only way the city could acquire the right to take the water of the Delaware river was by grant from the state or by authorized purchase or condemnation from one to whom the right had been granted by the state. State v. Jersey City, 94 N. J. Law, 431, 433, 111 Atl. 544, 19 A. L. R. 646. The power to determine the conditions upon which waters may be so diverted is a legislative function. The state may grant or withhold the privilege as it sees fit. Assuming in favor of the city, that its grantor received a perpetual right, unburdened by license fee or other charge, to divert all the water required for the use of the city and its inhabitants, does it follow that the state as against the city is bound by contract and is without power to impose a license fee as provided in the act?

The relations existing between the state and the water company were not the same as those between the state and the city. The company was organized and carried on its business for pecuniary profit. Its rights and property were privately owned and therefore safeguarded by the constitutional provisions here sought to be invoked by the city against the legislation of the state. The city is a political subdivision of the state, created as a convenient agency for the exercise of such of the governmental powers of the state as may be intrusted to it. The diversion of waters from the sources of supply for the use of the inhabitants of the state is a proper and legitimate function of the state. This function may be left to private enterprise, subject to regulation by the state; it may be performed directly; or it may be delegated to bodies politic created for that purpose, or to the municipalities of the state. Power to own, maintain and operate public utilities, such as waterworks, gas and electric plants, street railway systems, public markets, and the like is frequently conferred by the states upon their cities and other political subdivisions. For the purpose of carrying on such activities, they are given power to hold and manage personal and real property.

As said by this court, speaking through Mr. Justice Moody, in Hunter v. Pittsburgh, 207 U. S. 161, 178, 179, 28 Sup. Ct. 40, 46 (52 L. Ed. 151):

'The number, nature and duration of the powers conferred upon these corporations and the territory over which they shall be exercised rests in the absolute discretion of the state. Neither their charters, nor any law conferring governmental powers or vesting in them property to be used for governmental purposes, or authorizing them to hold or manage such property, or exempting them from taxation upon it, constitutes a contract with the state, within the meaning of the federal Constitution. The state, therefore, as its pleasure may modify or withdraw all such powers, may take without compensation such property, hold it itself, or vest it in other agencies, expand or contract the territorial area, united the whole or a part of it with another municipality, repeal the charter and destroy the corporation. All this may be done, conditionally or unconditionally, with or without the consent of the citizens, or even against their protest. In all these respects the state is supreme and its legislative body, conforming its action to the state Constitution may do as it will, unrestrained by any provision of the Constitution of the United State . * * * The power is in the state and those who legislate for the state are alone responsible for any unjust or oppressive exercise of it.'

In New Jersey it has been held that within the limits prescribed by the state Constitution, the Legislature may delegate to municipalities such portion of political power as they may deem expedient, withholding other powers, and may withdraw any part of that which has been delegated. Van Cleve v. Passaic Valley Sewerage Commissioners, 71 N. J. Law, 183, 198, 58 Atl. 571.

In the absence of state constitutional provisions safeguarding it to them, municipalities have no inherent right of self-government which is beyond the legislative control of the state.1 A municipality is merely a department of the state, and the state may withhold, grant or withdraw powers and privileges as it sees fit. However great or small its sphere of action, it remains the creature of the state exercising and holding powers and privileges subject to the sovereign will. See Barnes v. District of Columbia, 91 U. S. 540, 544, 545, 23 L. Ed. 440.

In Mt. Pleasant v. Beckwith, 100 U. S. 514, 524, 525 (25 L. Ed. 699), it was held that where a municipal corporation is legislated out of existence and its territory annexed to other corporations, the latter, unless the Legislature otherwise provides, becomes entitled to all its property and immunities. In the opinion it is said (100 U. S. 524, 525, 25 L. Ed. 699):

'Institutions of the kind, whether called cities, towns, or counties, are the auxiliaries of the state in the important business of municipal rule; but they cannot have the least pretension to sustain their privileges or their existence upon anything like a contract between themselves and the Legislature of the state, because there is not and cannot be any reciprocity of stipulation between the parties, and for the further reason that their objects and duties are utterly incompatible with everything partaking of the nature of compact.'

The power of the state, unrestrained by the contract clause or the Fourteenth Amendment, over the rights and property of cities held and used for 'governmental purposes' cannot be questioned. In Hunter v. Pittsburgh, 207 U. S. 179, 28 Sup. Ct. 40, 52 L. Ed. 151, reference is made to the distinction between property...

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