Helena Waterworks Company v. City of Helena

• Decision Date: 28 November 1904
• Docket Number: No. 27,27
• Citation: 25 S.Ct. 40,49 L.Ed. 245,195 U.S. 383
• Parties: HELENA WATERWORKS COMPANY, Appt. , v. CITY OF HELENA
• Court: U.S. Supreme Court

195 U.S. 383

25 S.Ct. 40

49 L.Ed. 245

HELENA WATERWORKS COMPANY, Appt.,

v CITY OF HELENA.

No. 27.

Argued October 28, 1904.

Decided November 28, 1904.

This case was begun by a bill filed in the circuit court of the United States by the Helena Waterworks Company, successor to the Helena Consolidated Water Company, to restrain the city of Helena from erecting purchasing, or acquiring a waterworks system for said city, and from acquiring water for such purpose, except it purchase the plant of the complainant company, and from incurring any indebtedness or expenditure of money for such purpose.

The rights in controversy are alleged to result from a contract made by the passage, and acceptance by the company, of a certain ordinance, number 248, passed and approved in January, 1890.

It is also alleged that the Helena Consolidated Water Company, predecessor of the complainant company, complied with all the terms of the ordinance, and expended large sums of money in erecting and maintaining the plant for supplying water to the inhabitants of the said city of Helena.

It is averred that the said city has adopted certain ordinances and taken certain proceedings to acquire and build a water system of its own, and that said ordinances and proceedings are in violation of the contract rights of the complainant company, guaranteed by § 11 of article 3 of the Constitution of the state of Montana, and § 10 of article 1 of the Constitution of the United States, and that the proceedings of the city in this behalf will amount to taking the property of the complainant company without just compensation, in violation of § 14 of article 3 of the Constitution of the state of Montana, and that its rights and property will be taken without due process of law, in violation of the 14th Amendment to the Constitution of the United States.

It is further averred that the taxation necessary for the construction of the city plant is in excess of any that can be lawfully levied for such purpose.

The case was tried upon an agreed statement of facts. In the circuit court a decision was rendered in favor of the waterworks company. Upon appeal to the circuit court of appeals that court reversed the decision of the circuit court, and remanded the case, with instructions to dismiss the bill. 58 C. C. A. 381, 122 Fed. 1.

The terms of the ordinance relied upon, and so much of the agreed statement of facts as is necessary to a determination of the case, sufficiently appear in the opinion.

Messrs. M. S. Gunn, B. Platt Carpenter, and Stephen Carpenter for appellant.

[Argument of Counsel from pages 384-386 intentionally omitted] Messrs. Edward Horsky, Edwin W. Toole, Thomas C Bach, E. C. Day, and R. Lee Word for appellee.

Statement by Mr. Justice Day:

Mr. Justice Day delivered the opinion of the court:

As the ordinance under consideration contains no express stipulation that the city shall not build a plant of its own to supply water for public and private purposes, and the grant is expressly declared not to be exclusive of the right to contract with another company, this case, unless it can be distinguished, is ruled by recent decisions of this court. Long Island Water Supply Co. v. Brooklyn, 166 U. S. 685-696, 41 L. ed. 1165-1168, 17 Sup. Ct. Rep. 718; Joplin v. Southwestern Missouri Light Co. 191 U. S. 150, 48 L. ed. 127, 24 Sup. Ct. Rep. 43; Skaneateles Waterworks Co. v. Skaneateles, 184 U. S. 354, 46 L. ed. 585, 22 Sup. Ct. Rep. 400. These cases hold that the grant of the franchise does not of itself raise an implied contract that the grantor will not do any act to interfere with the rights granted to the waterworks company, and that, in the absence of the grant of an exclusive privilege, none will be implied against the public, but must arise, if at all, from some specific contract, binding upon the municipality.

As stated by appellant's counsel: 'The position taken by appellants is, that by ordinance 248 the city has precluded itself from engaging in the commercial business of furnishing water to its inhabitants. We maintain that by the contract contained in this ordinance the Helena Consolidated Water Company [predecessor of appellant] for itself, its successors, and assigns, expressly agreed to furnish water to all of the inhabitants of the city during the term of twenty years; and that by reason of the contractual obligation thus assumed by the company there is the implied promise or undertaking on the part of the city that it will not, during such period, become a competitor of appellant.' A consideration of this contention requires an examination of the sections of the ordinance pertinent to a determination of the question:

'Sec. 1. There is hereby granted to the Helena Consolidated Water Company, and its successors and assigns, for the full term of twenty years from the passage hereof, the license and franchise of laying and maintaining water mains and pipes in and through all of the streets, alleys, avenues, and public grounds of the city of Helena for the purpose of conveying and distributing water throughout the said city, and for the purpose of selling the same to all persons, bodies, or corporations within the said city desiring to purchase the same, and to said city for fire, sewerage, and other purposes, in case said city desires to purchase the same, subject, however, to the provisions of this ordinance, hereinafter contained, establishing maximum rates, and generally to have and exercise all the rights, privileges, and franchises necessary to the proper and successful furnishing of water to the inhabitants of said city if required; provided, however, that nothing herein contained shall be so construed as to give to the said Helena Consolidated Water Company, or its successors or assigns, the exclusive right of occupying the streets, avenues, alleys, and public grounds of said city with water mains and pipes, or the exclusive right of conveying, distributing, or selling the same throughout the said city, or of furnishing the same to said city, except as hereinafter set forth.'

'Sec. 3. All pipes and mains, including service pipes connected therewith, shall be laid at the depth of 5 feet below the established grade, and shall be laid under the supervision of the street commissioner of said city as to grade and location in streets; and all repairs and extensions of such pipes and mains shall be done under the supervision of said street commissioner as to grade and location in streets. Nothing contained herein shall preclude said city of Helena from regrading or changing the grade of any street or streets within said city, or from the construction or maintenance of sewer work, or other works or plants of a public nature, or from letting, giving, or granting any franchises, rights, or easements to any person or persons, corporation or corporations, whomsoever, so long as such franchises, rights, and easements do not interfere with the franchises, rights, and easements hereby granted. And that said Helena Consolidated Water Company must and shall look solely and exclusively to the person or persons, corporation or corporations, to whom such franchises, rights, and easements have been given by said city for any and all damages the said Helena Consolidated Water Company may sustain by reason of any interference with any of its pipes, mains, or hydrants, or any exposure of the same caused by such person or persons, corporation or corporations.'

'Sec. 6. The said Helena Consolidated...