Southern Utilities Co. v. City of Palatka

Decision Date21 December 1923
Citation99 So. 236,86 Fla. 583
CourtFlorida Supreme Court

Rehearing Denied Jan. 28, 1924.

Suit by the City of Palatka against the Southern Utilities Company. From a decree for plaintiff, defendant appeals.


Syllabus by the Court


Legislature may authorize municipality to contract for public utility rates subject to legislative regulation. Under the provisions of section 8, article 8, of the state Constitution, that 'the Legislature shall have power to establish and to abolish municipalities, to provide for their government, to prescribe their jurisdiction and powers, and to alter or amend the same at any time,' the Legislature may by law authorize a municipality to make a contract for rates to be charged for public service rendered to the municipality or its inhabitants, and such a contract when duly authorized and entered into will be binding on the parties thereto, but the contract will be subject to the power of the Legislature under section 30, article 16, of the Constitution, to pass laws providing for regulating rates for 'services of a public nature.'

No express constitutional provision forbidding abridgment of police power. The Constitution of Florida contains no express provision forbidding the police power of the state to be abridged by irrevocable contract or otherwise.

City of Palatka not authorized to regulate electricity rates. The city of Palatka has not been authorized by statute to regulate rates for electricity furnished by a public utility company to the city and its inhabitants.

No obligation can extend to defeat legitimate governmental authority. Contracts must be understood as made in reference to the possible exercise of the rightful authority of the government, and no obligation of a contract can extend to defeat the legitimate government authority.

Law of contract governs both the duty of the private owner of public utility and governmental power to regulate rates. The duty of an owner of private property used for the public service to charge only a reasonable rate, and thus respect the authority of government to regulate in the public interest, and of government to regulate by fixing such a reasonable rate as will safeguard the rights of private ownership, are interdependent and reciprocal. Where, however, the right to contract exists, and the parties, the public on the one hand and the private on the other, do so contract, the law of the contract governs both the duty of the private owner and the governmental power to regulate.

Municipal contracts for public service sustained where not clearly illegal. Municipal contracts for the rendering of public service will be sustained where the power is given to make the contract, and the terms of it taken with the law controlling them are not clearly violative of some provision or principle of law.

Confiscatory public utility rates unauthorized. Although the governmental agencies having authority to deal with the subject may fix and enforce reasonable rates to be paid public utility corporations for the services by them rendered, that power does not include the right to fix rates which are so low as to be confiscatory of the property of such corporation.

Whether rates fixed by contract between governmental agencies and public utility confiscatory immaterial. Where public service corporations and the governmental agencies dealing with them have power to contract as to rates, and exert that power by fixing by contract rates to govern during a particular time the enforcement of such rates is controlled by the obligation resulting from the contract, and therefore the question of whether such rates are confiscatory becomes immaterial.

Municipality's legislative authority to contract for public service rates subject to regulation by Legislature. While section 8 article 8, of the Constitution, expressly authorizes the Legislature to prescribe the jurisdiction and powers of municipalities, yet any authority given a city by the Legislature to make contracts for public service rates is subject to the organic provision that 'the Legislature is invested with full power to pass laws for the correction of abuses, and to prevent unjust discrimination and excessive charges by persons and corporations engaged as common carriers in transporting persons and property, or performing other services of a public nature.'

Irrevocable contract or other abridgments of police power not expressly forbidden. There is in this state no provision of controlling law expressly forbidding irrevocable contracts or other abridgments of the police power, as is prescribed in the states of Iowa, Texas, Louisiana, and other states.

Contracts by cities for public utility rates subject to regulation by Legislature. Section 30, article 16, of the state Constitution, does not forbid the Legislature to authorize the cities of the state to enter into term contracts for service rates with public utility corporations; but the quoted organic provision merely makes such contracts that are otherwise valid and binding, subject to the 'full power' of the Legislature to provide for fixing just and reasonable rates in the premises.

Powers indispensable may be inferred from powers expressly given. Powers that are indispensable to the declared objects and purposes of a municipality may be inferred or implied from powers expressly given that are fairly subject to such construction. The difficulty of making specific enumeration of all such powers as the Legislature may intend to delegate to municipal corporations renders it necessary to confer some power in general terms. The general powers given are intended to confer other powers than those specifically enumerated.

General charter powers designed to confer necessary authority not expressly conferred. The general charter powers of a municipality usually relate to governmental funcitions as distinguished from business powers; and such general powers are designed to confer authority that is not expressly or specifically conferred and is essential or expedient to accomplish the purposes for which the municipality is organized.

Rule that expression of one thing excludes another generally inapplicable to governmental powers. Where the exercise of particular governmental powers may be fairly included in and authorized by general powers conferred upon municipalities the rule expressio unius est exclusio alterius is not generally applied to specific powers conferred to exclude powers that serve the purposes for which municipalities are organized, where such powers are not inconsistent with other powers conferred or with limitations imposed by the charter or by statute upon the municipal powers.

Authority to exercise business as distinguished from governmental powers should clearly appear. When a municipality undertakes to exercise powers of a business nature as distinguished from governmental functions, the authority for such exercise should clearly appear by express provisions or by reasonably certain implication from other powers conferred, and should be in entire consonance with the purposes for which the municipality was created. In determining whether a particular business power may be implied from express powers conferred, the rule expressio unius est exclusio alterius, as other rules of interpretation, may in proper cases be applied to effectuate the legislative intent in conferring municipal powers.

Authority to contract for lighting may be included in general powers. Ordinance contracts for supplying the city and its inhabitants with lights is a usual and necessary function of a municipality, and authority to make such contracts may be included in powers given in general terms, where such power is not in conflict with specific powers conferred.

City held authorized to make franchise contract fixing rates charged individuals for electric lights. The city of Palatka has statutory powers to pass ordinances that may be necessary and expedient for the good government of the city, * * * to regulate, alter, and improve and extend the streets of the city, * * * to do and perform all such other act or acts as shall seem necessary and best adapted to the general interests of the city, * * * and to provide for the lighting of streets of the city. These general statutory powers are sufficient to confer upon the city authority to make a franchise contract with provisions as to rates to be charged individuals for electric lights; such contract is consistent with the express power 'to provide for the lighting of streets of the city,' and is not repugnant to or inconsistent with any specific or general statutory power of the city.

Contract between public utility and city fixing rates of electricity furnished inhabitants controls until Legislature acts. There being a contract fixing rates for electricity to be furnished by the utility company to the inhabitants of the city of Palatka, and the Legislature not having authorized the city or any other governing body to regulate such rates, the question as to whether the contract rates are remunerative is immaterial, and the contract controls until the Legislature does act in the premises. Appeal from Circuit Court, Putnam County; Daniel A. Simmons, judge.


John T. G. Crawford, of Jacksonville, and Wm. B. Crawford, of Orlando, for appellant.

Thos. B. Dowda, W. P. Dineen, and J. J. Canon, all of Palatka, for appellee.



The bill of complaint herein brought by the city in effect alleges:

That in 1914 the city by ordinance made a contract by which the city granted to the predessors of the utility company, 'and its successors and assigns, the right and privilege to construct, own, operate,...

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