Pulaski Heights Sewerage Co. v. Loughborough

• Decision Date: 30 May 1910
• Parties: PULASKI HEIGHTS SEWERAGE COMPANY v. LOUGHBOROUGH
• Court: Arkansas Supreme Court

129 S.W. 536

95 Ark. 264

PULASKI HEIGHTS SEWERAGE COMPANY v. LOUGHBOROUGH

Supreme Court of Arkansas

May 30, 1910

Appeal from Pulaski Chancery Court; John E. Martineau, Chancellor affirmed with modification.

Decree modified.

R. C Powers, for appellant.

All previous agreements were merged in the written contract, and evidence of a previous agreement was inadmissible. Anson on Contracts, 213; Lawson on Contracts, § 372; Greenl. on Ev., § 275. Any person who taps a sewer must pay in proportion to the value of his property to be benefited thereby. Kirby's Dig., § 5726. The sewerage company is entitled to a charge which will pay its expenses, repay the investment made by the stockholders and a reasonable profit on the same. 179 Pa. 231; 36 L. R. A. 260; 174 U.S 179; 72 F. 955; 118 Cal. 556; 124 F. 599; 212 U.S. 19; 12 East 527; 116 U.S. 307; 148 U.S. 312; 94 U.S. 141; 134 U.S 418; 154 U.S. 362; 169 U.S. 466; 164 U.S. 578; 174 U.S. 739; 176 U.S. 167; 186 U.S. 275; 206 U.S. 1; 161 F. 995; 78 F. 261. The return must not be less than the legal rate of interest. 114 F. 561; 123 F. 951; 13 N.Y.S. 392; 124 F. 598; 7. Ont. App. 226; 169 U.S. 534; 1 L. R. A. 744; 169 U.S. 466. Without a contract with the sewerage company plaintiff had no right to empty his sewerage upon its property, and equity would enjoin him from doing so. 77 Hun 604; 191 Ill. 210; 113 Ga. 963; 142 Ill. 194; 59 A.D. 30; 70 N.Y.S. 284.

Rose, Hemingway, Cantrell & Loughborough, for appellee.

Since the record does not contain all the evidence before the chancellor, it should be affirmed without going into the merits. 45 Ark. 240; 38 Ark. 477; 58 Ark. 134; 72 Ark. 185; 80 Ark. 583; 83 Ark. 425; 77 Ark. 200; 81 Ark. 528. The charges for connection must be reasonable and not arbitrary. 94 U.S. 113; Id. 155; 110 U.S. 347; 115 U.S. 650; 143 U.S. 517. In the absence of legislation on the subject, the courts will fix a reasonable rate or charge. 149 Ill. 374; 143 N.Y. 277; 122 N.C. 207; 47 O. St. 1; 158 Ind. 519; 17 P. 490; 56 Ga. 431. The value of service to the public is the limit of the charge. 74 F. 87; 174 U.S. 739. Discriminating charges are unreasonable. 196 Ill. 626; 57 O. St. 336; 193 Pa. 175. Appellee was entitled to the injunction. 104 Ala. 315; 87 Me. 287; 64 How. Pr. 33; 165 N.Y. 27.

OPINION

BATTLE, J.

The Pulaski Heights Sewerage Company is a corporation organized under the laws of Arkansas for the purpose of building a sewer in the territory known as Pulaski Heights. Before the sewer was constructed J. F. Loughborough purchased many lots of ground in that territory. After his purchase the sewer was completed. Loughborough built a residence upon a part of his lots, and connected his house with the sewer in usual manner. He did so without compensating the sewerage company for the same. On this account the sewerage company severed his connection, and Loughborough thereupon again united and filed a complaint in the Pulaski Chancery Court against the Pulaski Heights Sewerage Company and Pulaski Heights Land Company and asked that defendants be restrained from interfering with his connections with the sewer until the town council of Pulaski Heights has given the sewerage company a right to operate the sewer and has fixed the fees for connection with the same. An order temporarily restraining the defendants from interfering with the sewer connection was made by the court. The defendants answered.

The only question in the case is, what compensation will entitle Loughborough's house to connection with the sewer of Pulaski Heights Sewerage Company? The chancery court, after hearing the evidence, held that plaintiff was entitled to connect his house with the sewer upon payment of $ 50, and made the temporary restraining order perpetual, and the defendants appealed.

The sewerage company contends that it is a private corporation, and no one has a right to connect with its sewer except upon terms to which it shall agree. Is it correct? In Munn v. Illinois, 94 U.S. 113, 126, 24 L.Ed. 77, it is said: "Property does become clothed with a public interest when used in a manner to make it of public consequence, and affect the community at large. When, therefore, one devotes his property to a use in which the public has an interest, he, in effect, grants to the public an interest in that use, and must submit to be controlled by the public for the common good, to the extent of the interest he has thus created. He may withdraw his grant by discontinuing the use; but, so long as he maintains the use, he must submit to the control." "Upon this principle, the Legislature can fix the maximum of charge for the storage of grain in public warehouses, and for carriage of freight and passengers by common carriers. From the same source comes the power to regulate millers, bakers, hackmen, ferriers, wharfingers, innkeepers, and the like; 'and in so doing to fix the maximum of charge to be made for services rendered, accommodations furnished and articles sold.' Munn v. Illinois, 94 U.S. 113, 24 L.Ed. 77; Budd v. New York, 143 U.S. 517, 36 L.Ed. 247, 12 S.Ct. 468; Dow v. Beidelman, 125 U.S. 680, 31 L.Ed. 841, 8 S.Ct. 1028; S.C., 49 Ark. 325; Mobile v. Yuille, 3 Ala. 137. Upon the same principal it was held in Spring Valley Waterworks v. Schottler, 110 U.S. 347, 28 L.Ed. 173, 4 S.Ct. 48, 'that it is within the power of the government to regulate the price at which water shall be sold by one who enjoys a virtual monopoly of the sale.' " Leep v. Railway Company, 58 Ark. 407, 416.

The sewerage company was organized for the purpose of constructing, maintaining and operating sewers, and renting or selling the right to connect with and use the same. It constructed a sewer about twelve or thirteen hundred yards long, or longer. All persons who wish, upon payment of the fee demanded, are allowed to connect with and use it. About one-third of it is built upon private property. It is not confined to the use of any particular persons, but all who can are invited to connect with and use it upon the payment of a fee agreed upon. All persons hereafter buying real estate sufficiently near to make it useful, upon paying the fee, may make connection and use it. To the public within reach of it, or who may come within reach of it, it is useful and necessary in many ways. The sewerage company has in this way devoted the sewer to a use in which the public has an interest.

In the absence of legislation as to the maximum of charges for the use of sewers courts in cases like this can determine what is reasonable. They can not prescribe rates which shall be charged in the future and in cases other than that before them. That would be a legislative act. Munn v. Illinois, 94 U.S. 113, 24 L.Ed. 77; Salt River Valley Canal Co. v. Nelssen (Ariz.), 10 Ariz. 9, 85 P. 117.

In Salt River Valley Canal Co. v. Nelssen, 10 Ariz. 9, 85 P. 117, in which the court determined the amount a corporation should charge, the court said: "In determining what is a reasonable price to be charged for services by a public corporation, an examination must not only be made from the point of view of the corporation, but from that of the one served also. A reasonable rate is not one ascertained solely from considering the bearing of the facts upon the profits of the corporation. The effect of the rate upon persons to whom services are to be rendered is a deep concern in fixing thereof, as is the effect upon the stockholders or bondholders. A reasonable rate is the one that is as fair as possible to all whose interests are involved."

In Covington & Lexington Turnpike Road Co. v Sandford, 164 U.S. 578, 596, 41 L.Ed. 560, 17 S.Ct. 198, the question under consideration was what was a reasonable toll to be charged by a turnpike company? The court said: ...