Penn Iron Co. v. City of Lancaster

• Decision Date: 28 July 1904
• Docket Number: 56-1903
• Citation: 25 Pa.Super. 478
• Parties: Penn Iron Company, Limited, Appellant, v. City of Lancaster
• Court: Pennsylvania Superior Court

25 Pa.Super. 478

Penn Iron Company, Limited, Appellant, v. City of Lancaster

No. 56-1903

Superior Court of Pennsylvania

July 28, 1904

Argued November 11, 1903

Appeal by defendant, from decree of C.P. Lancaster Co., Equity DocketNo. 3, dismissing bill in equity, in case of Penn Iron Company, Limited, v. City of Lancaster et al.

Bill in equity for an injunction.

The facts appear by the opinion of the Superior Court.

Error assigned was decree dismissing the bill.

J. W Appel, of Appel & Appel and A. J. Steinman, for appellant.-- Water rents are not imposed or collected in the exercise of the taxing power, but the obligation to pay for the use of water rests upon an implied contract on the part of the consumer to make compensation for water which he has applied for and received on the terms and conditions made public Rieker v. Lancaster City,7 Pa.Super. 149;Brass v. Rathbone,153 N.Y. 435(47 N.E. 905).

When a municipal corporation engages in things not public in their nature, it acts as a private individual, no longer legislates but contracts, and is as much bound by its engagements as is a natural person: Western Saving Fund v. Phila.,31 Pa. 175;Wheeler v. Phila.,77 Pa. 338.

The case is a proper one for the interposition of equity Bierbower's App., 107 Pa. 14;Com. v. R. R. Co.,24 Pa. 159;State v. Jersey City,45 N.J.L. 246;Young v. Boston,104 Mass. 95;Kemble v. Titusville,135 Pa. 141;Brymer v. Butler Water Co.,172 Pa. 489;Easton, etc., Pass. Ry. Co. v. Easton,133 Pa. 505;Arthur v. Polk Borough School District,164 Pa. 410;St. Mary's Gas Co. v. Elk County,168 Pa. 401;Ridgway v. Bridgeport, 5 Montg.73;School Boards v. Monongahela WaterCo., 15 Pa. C.C. 329.

J. W. Brown, with him C. Reese Eaby, city solicitor, and Charles R. Kline, for appellee.-- This is not a proper case for the interference of a court of equity, for the plaintiffs have an adequate remedy at law: Harrisburg's App., 107 Pa. 102;Mann v. Easton, 2 Northampton, 177; Foster v. Philadelphia, 12 Phila. 511;Howard's App., 162 Pa. 374;Stroud v. Philadelphia,61 Pa. 255;Silkman v. Water Commissioners,152 N.Y. 327(46 N.E. 612);McHenry v. Jewett,90 N.Y. 58;Girard Life Ins. v. Philadelphia,88 Pa. 393.

Before Rice, P. J., Beaver, Orlady, Smith, Porter, Morrison and Henderson, JJ.

OPINION

ORLADY, J.

The plaintiff is a limited partnership, which owns and operates extensive mills and works in the city of Lancaster, employing about 450 men, and consuming daily over 150,000 gallons of water.The defendant is a municipal corporation, a city of the third class, owning and operating a water plant, and furnishing its citizens with water from its mains and pipes.To conduct this branch of its affairs, there was a special water department created; and ordinances were enacted providing for a system of levying, assessing, and collecting water taxes.A schedule of water rents was provided for many industrial establishments and private uses, but no rate was fixed for the plaintiff company.

The rate charged per annum to all consumers was from April to April of each year.From 1879 to October 1, 1899, the plaintiff company had been a consumer of water, for which it paid an annual water rent of $ 400, payable semiannually.It does not clearly appear how this rate originated, but it is an admitted fact that this sum had been paid annually for over twenty years.During this period of time an increased rate was urged by the city on two occasions, but on an appeal to the water company having charge of the dispute amount was not changed.

This controversy arose by the introduction of a meter by the city, and a demand that the plaintiff should pay according to meter rates.It is admitted that the city has power to charge consumers of water at meter rates, and to adopt a just discrimination of rates affecting certain classes of consumers, as was decided in Rieker v. Lancaster City,7 Pa.Super. 149.

The plaintiff's contention is that under a special contract or continued course of business for twenty years and upwards, the defendant company could not change the price per annum in the middle of the year.Under the undisputed system in force in the city, it had entered on the year beginning April 1, 1899 and ending April 1, 1900, as it had begun each of the preceding years, that is without having received notice of any change in the annual water rate, or that the charge should be by meter instead of a fixed sum.

The city manifestly took this view of the case as it rendered a bill to the iron company for water rent to October 1, 1899, at the rate of $ 200 for six months, and accepted payment therefor on October 21, 1899, with its regular discount of five per cent.A meter was placed at the plaintiff's mill in September, 1899, and in January following, a bill was rendered for the use of water from October 1, 1899, to January 1, 1900, amounting to $ 641.38, in regard to which the learned judge said in his opinion: " No rate had ever been fixed either by council or water company for establishments of this character, and no notice of the rate intended to be charged against the plaintiff was ever given to it before the bill of $ 641.38 for 12,837,000 gallons, was on or about January 1, 1900, furnished to it."

While the ordinance requires that a written or printed notice of the meter rates showing the amount of rent to be charged shall be left at the premises on or before the first day of May in each year, there is no proof to show that the iron company had received notice that it would be charged meter rates, nor that any rate had been fixed for its use of water.The clerk of the water company testified that he had sent a notice to the iron company on the first day of April, 1899 stating that a meter would be affixed to its premises, but he did not specify the rate claimed...