Millville Improvement Co. v. Millville Water Co.

• Decision Date: 26 March 1921
• Docket Number: No. 49/457.,49/457.
• Citation: 113 A. 516
• Parties: MILLVILLE IMPROVEMENT CO. et al. v. MILLVILLE WATER CO.
• Court: New Jersey Court of Chancery

113 A. 516

MILLVILLE IMPROVEMENT CO. et al.

v. MILLVILLE WATER CO.

No. 49/457.

Court of Chancery of New Jersey.

March 26, 1921.

Suit by the Millville Improvement Company and others against the Millville Water Company to restrain defendant from refusing to supply water to tenants, unless the complainant owner of the buildings would pay or guarantee to pay the usual charges for water supplied to buildings. Decree for defendant.

Louis H. Miller, of Millville, for complainants.

Lewis Starr, of Camden, for defendant.

LEAMING, V. C. Complainant corporation is the owner of eight several residence buildings in the city of Millville; the individual complainants are the several tenants who occupy the buildings. The corporation, as landlord, and the individuals, as tenants, join in the bill filed herein to restrain defendant water company from carrying out its purpose to refuse to supply water to the several tenants unless complainant corporation, as owner of the buildings, pays or guarantees the payment of the usual charges for water to be supplied to the buildings for the use of the several tenants.

There is no dispute touching the essential facts. Each of the eight buildings referred to is what is known as a double tenement house, that is, two residences united in one building. Each residence is occupied by a tenant, making in all sixteen tenants as complainants.

Defendant corporation is a water company supplying the inhabitants of the city of Millvine with water. Defendant is incorporated under the Water Act of 1876 (P. L. 1876, p. 318: 3 Comp. St. p. 3635).

It has long been the custom and may be said to be the adopted rule of defendant company in supplying water to the inhabitants of the city to deal exclusively with the owners of buildings and to require from such owners the payment for water service at defined and uniform rates, payable in advance each six months. Water rents for the several buildings here in question have heretofore been paid in that manner by complainant corporation. Complainant corporation has now made leases to the several individual complainants in which each of the tenants has engaged to pay the water rents. All of the tenants are willing to pay defendant company in advance in accordance with defendant's rules as to rates; but defendant is unwilling to treat with any of them or to accept their money or to in any way recognize their liability to pay unless complainant corporation, as owner of the buildings, first guarantees the payments.

The single question for determination and the sole controversy between the parties is whether defendant water company is privileged to require the owner to pay for the water to be supplied to the tenants of the buildings or to guarantee such payment, and to refuse to recognize the claim of right of the several tenants to pay in advance for water to be supplied to them.

This question does not appear to have heretofore arisen in this state; but the authorities in other jurisdictions touching the relations of water companies to their patrons appear to be so uniform and sound in principle that the general inquiry here submitted can scarcely be said to be an open question.

It is well recognized that a water company, though charged with the public duty of furnishing water to all of the inhabitants without discrimination, may adopt reasonable rules for the conduct of its business and the operation of its plant, and such rules, so far as they affect its patrons, are binding on them, and may be enforced, even to the extent of denying water to those who refuse to comply with them. Such power is not dependent upon any express legislative authority; it is incident to a corporation of that nature. Robbins v. Bangor Ry. & El. Co., 100 Me. 496, 62 Atl. 136, 1 L. R. A. (N. S.) 963; State v. Butte City Water Co., 18 Mont. 199, 44 Pac. 966, 32 L. R. A. 697, 56 Am. St. Rep. 574; Am. Water Co. v. State, 46 Neb. 194, 64 N. W. 711, 30 L. R. A. 447, 50 Am. St. Rep. 610; State v. Water Supply Co., 19 N. M. 27, 140 Pac. 1056, L. R. A. 1915A, 242: Watauga Water Co. v. Wolfe, 99 Tenn. 429. 41 S. W. 1060, 63 Am. St. Rep. 841. This right of reasonable regulation is uniformly held to include the right to shut off the water supply of delinquents, and also the right to require consumers to pay water rents for a reasonable time in advance. State v. Water Supply Co., supra; Watauga Water Co. v. Wolfe, supra; Hatch v. Consumers' Co., 17 Idaho, 204, 104 Pac. 670, 40 L. R. A. (N. S.) 263, affirmed 224 U. S. 148, 32 Sup. Ct. 465, 56 L. Ed. 703; State v. Butte City Water Co., supra. Various periods for advance payments have been held reasonable; but in Rockland Water Co. v. Adams, 84 Me. 472, 24 Atl. 840, 30 Am. St. Rep. 368, one year was held an unreasonable period. In all such cases it is to be assumed that the regulation includes a right of the patron to a return of such part of the advance payment as is unearned by reason of the service being discontinued before the end of the period for which an advance payment has been made.

Section 13 of the Water Act, under which defendant company is operating, provides:

"That said company may sell and dispose of the water issuing from their reservoirs, acqueducts or pipes, for such price or prices, or quarterly or annual rents, and such restrictions as they may think proper."

So far as this provision relates to rates or regulations, it can only be understood as contemplating reasonable rates and restrictions.

But although the right of a water company to adopt and enforce reasonable rules for the conduct of its business and operation of its plant is thus uniformly recognized, such rules, to meet the requirements of reasonable regulations, are necessarily subordinated to the recognized public duty of corporations of that nature touching uniformity and universality of service, that is, the public duty of corporations of that nature to recognize and respect the paramount right of all citizens, similarly situated and appropriately circumstanced, to receive water, and to receive it on the same terms. Consistently with that duty it is clear that service of water cannot be denied to a tenant whose premises are adequately equipped to receive such service and who is willing to pay for it.

That conclusion is rendered manifest by a more detailed consideration of the relations of a water company to its patrons. In the absence of legislative authority, there is no lien on the real estate for water supplied to either an owner or a tenant; the water is supplied on the credit of the patron. Turner v. Revere Water Co., 171 Mass. 329, 50 N. E. 634, 40 L. R. A. 657, 68 Am. St. Rep. 432; State v. Albuquerque Water Supply Co., supra. In the cases last cited it is also held to be an unreasonable regulation to deny water to an owner or occupant of a building because of a default of a prior owner or prior occupant, though reasonable to deny water to a delinquent patron. This personal nature of the service and the rights of all citizens to its enjoyment necessarily...